CPS inspector blasts former CEO, ex-board member for ‘horrible’ ethical lapses

Disgraced former Chicago Public Schools CEO Barbara Byrd-Bennett, now in prison for a kickback scheme involving millions of dollars in school contracts, accepted lavish meals at some of the city’s priciest restaurants from a CPS vendor whose investors included Deborah Quazzo, who at the time was a Mayor Rahm Emanuel appointee to the Chicago Board of Education.

That’s according to a new report from CPS Inspector General Nicholas Schuler, whose investigation led the FBI to Byrd-Bennett.

Among the findings Schuler has reported confidentially to the school board:

• Byrd-Bennett steered a $6 million contract to Think Through Math, a company in which Quazzo was invested.

• Byrd-Bennett and the coterie of top aides she brought with her to CPS had a series of expensive meals on that company’s dime during the bidding process for that deal.

• Quazzo violated the school system’s ethics code by talking up her companies’ products to CPS principals and introducing them to company representatives — which she at first denied to Schuler she’d done but acknowledged after being shown emails proving that.

“While Quazzo’s ethical violations were arguably less egregious than Byrd-Bennett’s violations involving her dealings with TTM,” Schuler wrote in the 26-page memo, obtained by the Chicago Sun-Times, “Quazzo’s violations were significant, nonetheless.”

According to the inspector general’s memo, CPS’s ethics policy violates state law and needs to be changed. Schuler wrote that it’s not enough for board members to decline to vote on matters in which they have a significant financial interest. He says CPS can’t do business at all with those companies — unless the board member with an ownership stake either divests or resigns.

In 2015, Quazzo said she saw no conflict of interest but asked Emanuel not to reappoint her after a Sun-Times investigation revealed that companies in which she had a stake had seen their business from CPS triple in the year since her appointment, taking in more than $3.8 million from deals with the city’s schools. Also, the Quazzo companies had gotten $1.3 million from CPS-funded charter schools.

Schuler says Quazzo had financial interests in eight companies doing business with CPS while on the board.

Mayor Rahm Emanuel. | Max Herman / Sun-Times files

Emanuel defended Quazzo in the wake of the Sun-Times reports in 2014 and 2015, which led to calls for her resignation and prompted the recently concluded investigation by the inspector general, saying, “The city was lucky to have her.”

Quazzo was Emanuel’s third top-level schools appointee to leave under an ethical cloud. Byrd-Bennett is now in a federal prison serving a 4½ year sentence after she was caught steering more than $20 million in no-bid contracts to her previous employers at SUPES Academy and promised kickbacks. Her replacement, Forrest Claypool, was pushed out in December after lying to Schuler to cover up an ethical violation involving CPS’ top attorney.

According to Schuler’s report, Quazzo “appears to have at least facially violated the Illinois School Code’s prohibition on school board members having an interest in board contracts,” which would be a Class 4 felony.

Nicholas Schuler. | Sun-Times files

Schuler stopped short, though, of seeking criminal charges because he found Quazzo was told by CPS and mayoral staffers that she could serve on the Board of Ed as long as she disclosed her interests, abstained from voting on any deals involving her businesses and refrained from taking part in board discussions of them. The Cook County state’s attorney’s office agreed that no criminal prosecution was warranted.

Asked about Schuler’s findings, Quazzo responded: “As you know, the report you reference has not been made publicly available. From what I have been told by CPS, the Office of Inspector General concludes that no laws have been violated and no further action is being taken related to me. I consistently adhered to the board’s professionalism and ethical standards. I am proud of my service on the Chicago Board of Education and the collective strides to support and provide a high quality education to CPS students.”

Her lawyers told Schuler she didn’t take part in the school board discussion of the $6 million contract with Think Through Math.

CPS will change its ethics policy, spokeswoman Emily Bolton says.

“CPS has delayed sharing those revisions at the request of the inspector general, and we hope to present our recommendations to the board in the near future,” Bolton says. “Quazzo served CPS with the best of intentions, and we appreciate her work on behalf of students.”

Shortly before the FBI came knocking on Byrd-Bennett’s door, the then-CPS CEO came to Quazzo’s defense, telling her at a board meeting, “My experience with you is as a woman of impeccable integrity, and I really regret that you unfortunately have to go through this kind of rigmarole.”

While Byrd-Bennett was emailing her former employers at SUPES about the money they would have set aside for her and her grandchildren once she succeeded in landing them millions in no-bid deals, she was also enjoying Chicago’s steakhouse scene, with Think Through Math paying the tab.

A top official for the online math-tutoring company paid for 23 dinners costing $8,108 involving CPS staffers at Gibson’s, Morton’s, Chicago Cut and III Forks, among other dining spots, Schuler found. He said Byrd-Bennett participated in meals worth at least $6,100 through March 2015, weeks before she resigned.

Unlike the SUPES deals, the tutoring work was put out for competitive bids.

But Schuler found that Byrd-Bennett and her chief of staff tailored the services CPS was asking for to fit Think Through Math after meetings and dinners with a company representative.

“This is what we have been waiting for,” the official, Traci Burgess, said in an email to her staff on the day CPS’ request for proposals was released.

Burgess and Byrd-Bennett continued to email each other during the “quiet period” before a bid is awarded, according to Schuler’s findings, when such communications are typically prohibited.

A week after the board approved what was supposed to be a $6 million contract but which ultimately paid out about $1.9 million, Byrd-Bennett was treated to dinner at Gibson’s.

Think Through Math also paid $50,000 to sponsor SUPES events from 2012 to 2014 after Byrd-Bennett recommended doing so as a way to access “key decision makers.”

According to Schuler, Burgess was later offered a job at SUPES by co-founder Gary Solomon, who now also is serving a prison sentence. She declined that offer.

Burgess has been barred from any CPS accounts and contracts held by the company she has since moved to, BrightBytes Inc.

CPS says it temporarily suspended purchase requests for the company that has bought Think Through Math — Imagine Learning, paid about $70,000 this school year — but won’t suspend it outright to avoid disruptions.

“Debarment” notices have been sent to MasteryConnect, another of the companies Quazzo invested in and to its CEO, who declined to answer any questions. MasteryConnect was paid $48,209 last year.

The night before the school board voted to give the contract to Think Through Math, Quazzo had hosted Byrd-Bennett at her Gold Coast home for dinner. Afterward, Quazzo emailed Think Through Math’s CEO — the same man she had earlier vowed to help “get more traction in CPS.” She told to tell him the schools chief told her over dinner she was “thrilled” to have the company working for the school system.

Quazzo told the inspector general’s office that, by the time she discussed Think Through Math with Byrd-Bennett, the deal was “in the board agenda and, therefore, was a ‘fait accompli.’ ”

Schuler said Quazzo maintained that her discussions with Byrd-Bennett at that point were understandable because the contract was already “baked.”

“Quazzo’s understanding cannot be correct because it implies that the board is simply service as a rubber stamp on all deals presented by CPS personnel,” Schuler wrote.

He found that Quazzo didn’t promote any products “with the purpose of advancing her own finances to the detriment of CPS.” Nor did she influence the bidding process.

But her discussions with the CEOs of the company and the school district “demonstrate that she did not fully recuse herself from the matter,” according to Schuler.

When he first questioned Quazzo in 2015, he wrote that she told him it would be “unconscionable for her to push for CPS to purchase these companies’ products.”

In fact, she had directly contacted CPS principals including the principal of Brooks College Preparatory Academy, telling him they “needed to help” another test prep company’s chief executive “sell Brooks’ results to other schools.”

“While Quazzo — a large TTM [Think Through Math] investor who had just doubled her investment in the company — was trying to help TTM get more traction in CPS, TTM was actually engaged in improper dealings with the CEO,” Schuler wrote. “TTM should not have been awarded the district-wide contract, and Quazzo should not have been pushing that company. The combination of the two is horrible.”

Sun-Times reports prompted the investigation by the inspector general.