School kickback scheme described in e-mails

In a series of conversations with her boss in November 2014, Kenyetta (KC) Wilbourn, the former principal of Mumford High School, laid bare the nature of alleged corruption in the Educational Achievement Authority, according to an account contained in hundreds of pages of documents and e-mails released by the EAA this week.

Wilbourn acknowledged that she would help vendors score school business by ghost writing their responses to bids. She would take a cut of vendor payments and allow vendors to overbill. In one case, she said she had a vendor hire her uncle to channel money to her cousin.

“She said she was taught all of this during her DPS days by veteran principals,” EAA Chancellor Veronica Conforme wrote in a summary of the conversations she sent to district lawyer Michelle Crockett, who later forwarded them to the FBI. DPS is a reference to Detroit Public Schools, where Wilbourn worked for years before joining the EAA, the special school district created in 2012 to turn around Michigan's lowest-performing schools. Wilbourn mentioned specifically a former principal who now works as an administrator for DPS as her mentor in how to work vendors to her advantage.

Wilbourn, who could not be reached for comment today, resigned soon after the phone conversations and promised to cooperate with an FBI investigation, according to the documents released under the Freedom of Information Act. She told the Free Press last week she had agreed to plead guilty to bribery and tax evasion.

In a statement today, the EAA said officials have been working hard to root out corruption for more than a year.

"Most of the individuals in question no longer work for the EAA," the statement said. "Those who are still employed have not been charged with a crime; however, Chancellor (Veronica) Conforme has implemented safeguards that sharply limit the powers of any single employee to make unilateral decisions to spend money."

The coziness between EAA officials and the vendors who received millions of dollars in business work appears to be at the heart of a federal corruption probe. In the spring of 2014, federal investigators began subpoenaing records related to dozens of businesses that billed the EAA.

Records show that one company investigators were interested in was Inner City Sporting Goods, which has no incorporation records listed with the State of Michigan. The company billed the EAA more than $34,800 for sporting equipment provided to Mumford High School.

"Please find attached, information related to Inner City Sports," the authority's lawyer, Crockett, wrote in an e-mail to the FBI. "We have no record of a contract between the EAA and this organization."

A man who answered the phone at the number listed on the invoices refused to answer questions and hung up. Two addresses listed on Inner City Sporting Goods invoices are tiny storefronts along West McNichols near Outer Drive in Detroit’s Rosedale Park Neighborhood.

One of the addresses is now a medical marijuana dispensary that opened about a month ago. The other lists Inner City Sporting Goods on the door, but no one answered when a Free Press reporter visited there this afternoon.

Bankruptcy records from 2011 show a man named Deon Godfrey claimed ownership of Inner City Sports, stating in the bankruptcy filing that he ran the made-to-order T-shirt company from his home. But invoices show he was paid for far more than T-shirts.

One Inner City Sporting Goods invoice, for $21,713, was for sporting equipment, including three "Porta phone headsets" or $3,995 apiece. The devices allow football coaches on the field to communicate with other coaches in the press box. The invoice also includes what appears to be a football blocking sled with pads for $4,179.

Harry Pianko, the EAA's chief financial officer, wrote to Crockett in an October 2014 e-mail that a $19,000 invoice to Mumford appeared to have been approved by Wilbourn.

"It looks like it's a stamp of KC's signature," Pianko wrote, adding parenthetically, "I don't know why they have a stamp."

Wilbourn, a former Army reservist known for her feisty personality, was seen as a rising star during her more than decade-long career with Detroit Public Schools. She joined DPS as a teacher in 1998 and later became a department head at Brenda Scott Middle School, an assistant principal at the former Finney High School, and then, in 2009, the principal of Denby High School.

When Wilbourn applied for a job with the EAA in March 2012, she so impressed one interviewer that the person wrote “Hire her today” in big letters at the top of a scoring sheet. She was given a $130,000 salary. She also got a signing bonus.

Wilbourn was rated highly effective — the highest score possible — by the person who conducted her evaluation on Aug. 11, 2013. In a midyear performance review on Jan. 20, 2014, Wilbourn was commended for bringing stability to the previously “chaotic” climate at Mumford but criticized for not properly preparing student performance data.

A document dated June 25, 2015 — more than seven months after Wilbourn resigned — rated her minimally effective.

The documents released this week show the IRS also began probing Wilbourn’s finances. Crockett, in a March 9, 2015, e-mail to John Stromberg of the IRS, said Wilbourn’s 2013 W-2 showed she earned $120,118.85 in wages and tips and $130, 430.41 in Medicare wages.

Another company that appeared in a list of vendors but didn't have a contract was All State Sales, a company apparently tied to Wilbourn. On April 1, the FBI wrote to the EAA, informing officials that "you have been identified as a possible victim in a Federal Bureau of Investigation forfeiture investigation involving Kenyetta Wilbourn."

The letter goes on to note that the FBI seized $2,300 from a Comerica Bank account in Livonia in the name of All State Sales.

Investigators also sought records on other companies, including some that worked with schools beyond Mumford, where Wilbourn was stationed. One company that attracted the attention of investigators was Esperanza, a now defunct nonprofit that had contracts to provide conflict resolution services at Pershing and Denby high schools as well as Burns Middle School and the Phoenix Multicultural Academy. An invoice report shows the EAA paid Esperanza $1.6 million from 2012-15.

In June, Wayne County prosecutors charged Cecilia Zavala, Esperanza's former chief operating officer, and Rudolfo Diaz, the former principal at Western International High School, part of the Detroit Public School District, with embezzling thousands of dollars from Esperanza Detroit. Authorities said the money was supposed to be used to serve at-risk students.

Contact John Wisely: 313-222-6825 or jwisely@freepress.com.

Contact Ann Zaniewski: 313-222-6594 or azaniewski@freepress.com.