A Failure And Breach of Trust

As residents and taxpayers prepare to vote Yes or No on CUSD’s Measure H & I’s bond taxes, we hear cries of “We have no money for maintenance and construction” from CUSD’s Trustees, Superintendent and staff. But when their spending habits are brought under a microscope they fail the test as stewards of our money. Here is a prime example of the Board putting their own interests ahead of the taxpayers and the students to the tune of $41,975.00 taxpayer dollars in attorney fees to protect one of their own!

How many leaky roofs, broken air conditioner units, ramps, etc. could have been fixed with these funds rather than going to attorneys to protect a fellow Trustee? While I realize that $41,975.00 is a drop in the $500,000,000+ budget bucket of CUSD, when the board claims they are responsible stewards of our taxpayer dollars, they need to show a history of wise stewardship. Their past actions do not show wise stewardship at all!

Former Trustee Hatton-Hodson’s Financial Misadventures and the FPPC

In the fall of 2016 it was discovered that now former elected CUSD Trustee Lynn Hatton-Hodson (she resigned on June 2, 2017) had a financial conflict of interest due to her having an ownership interest in a vendor to Capistrano Unified School District.  She apparently did not disclose this conflict in her required filing with the FPPC known as a Form 700 (Statement of Economic Interest).  A citizen made a complaint to the FPPC (the Fair Political Practices Commission) and the Orange County District Attorney’s office about Ms. Hatton-Hodson’s failure to disclose her conflict.

Normally the filling out and defending of a Form 700 is completely on the shoulders of the person who files it – whether a successful candidate for office like Ms. Hatton-Hudson or the losing candidate who is not elected to office.  In this case the CUSD Board of Trustees had an attorney who works for them opine that filling out a Form 700 was an official act of a Trustee and any challenge to that entitles the Trustee to a taxpayer funded defense by attorneys who specialize in this field.  Of course there was no opinion by that attorney about a candidate who did not get elected, but that is food for thought for another day.

The CUSD Board of Trustees to Ms. Hatton-Hodson’s Rescue With Your Tax Dollars

In September 2016, the Board of Trustees voted 6 to 0 (Ms. Hatton-Hodson did not vote) to retain the law firm of Olson, Hagel & Fishburn, LLP of Sacramento to defend their colleague before the FPPC (but not the DA’s office).  The Board of Trustees twice authorized the District to spend taxpayer dollars on this law firm to defend one of their fellow trustees.

The Olson firm was specifically requested by Ms. Hatton-Hodson in a letter addressed to CUSD’s general counsel Mr. David Huff of the law firm of Orbach, Huff, Saurez & Henderson, LLP. [Hatton-Hodson ltr to Huff].  Interestingly the fee agreement between the Olson firm and the District identified the District as the Client not Ms. Hatton-Hodson. [9-28-16 Professional Services Agreement] and amended (for more fees) on 12-6-16 12-6-16 Amendment to Olson Authorization. Yet they apparently defended Ms. Hatton-Hodson – not the District – before the FPPC.

Public Records Act requests to CUSD and the FPPC – Surprise: Three Law Firms for One Matter!

When we sought records under the Public Records Act these requests included attorney fee invoices related to the FPPC matter from CUSD.  In documents disclosed by CUSD we received invoices from not one but three law firms.

In addition to the Olson law firm, CUSD was paying invoices for this matter from the Orbach firm apparently to give legal advice that the Board could spend taxpayer funds to defend Trustee Hatton-Hodson and presumably to watch over the Olson firm.  Also billing on this matter was the law firm of Werksman, Jackson, Hathaway & Quinn apparently acting as an expert to the Orbach firm (strangely not the Olson law firm).  This is a criminal defense law firm (https://werksmanjackson.com/). The hourly rate for the Werksman firm’s senior partner: $750 per hour!  [Werksman Invoices]. All three law firm’s invoices were heavily redacted (blocked out) so that we could not read what these law firms did in Ms. Hatton-Hodson’s defense.

Here is the total of what was spent on these three sets of attorneys:

Law Firm          Amount

Olson:              $16,274.50

Orbach:           $11,728.00

Werksman:      $13,972.50

Total:              $41,975.00

As an attorney myself I understand and value the need for the attorney client communication privilege.  However in this case we have taxpayer funds being spent to defend a financial disclosure that is normally funded by the politician themselves.  Therefore the taxpayers should have a right to know what they got for their money.

CUSD could have waived this privilege and given us un-redacted invoices but it choose to not do so.

Serious Questions Remain ESPECIALLY IN Light of CUSD’s Request for our Bond Tax Dollars (Measures H & I)

So after obtaining everything in writing from CUSD (and the FPPC) that they would disclose, many serious questions remain:

What did the Orbach firm do for CUSD that the Olson firm was not already doing other than justifying an expenditure of taxpayer dollars to defend Ms. Hatton-Hodson from her own failures in filling the Form 700?

Why was an expensive criminal defense “expert law firm” hired for this matter (via the CUSD General Counsel’s office rather than the Olson law firm) adding to the cost to taxpayers for Ms. Hatton-Hodson’s failures?

What did the children and taxpayers get for this expenditure of public funds?  Apparently absolutely nothing except dollars that could have been used for repairs and maintenance in the class room are now in the possession of attorneys.  In fact, three sets of attorneys!

What did the children CUSD is supposed to serve get for these tax dollars going to attorneys?  Nothing. No roofs repaired, no AC units repaired or replaced, no ramps repaired, etc.

What did the other Trustees get for this expenditure of their constituents’ money?  Apparently the comfort of knowing that if in the future they are caught with their proverbial hands in the financial cookie jar they will have taxpayer dollars to defend their actions and mistakes as political candidates.

And the most important question for taxpayers and voters who will decide to pass or vote No on Measures H & I, in light of this, how well does the Board of Trustees do at earning our trust that they are seeking the best interests of students and taxpayers?  I would argue that this is evidence that they have failed that trust.  They should not be rewarded with more of our hard earned and already over taxed funds!

Vote No on Measures H & I. www.capokidsfirst.com and www.nocusdbonds.com

Craig Alexander is a resident of Dana Point and an attorney who represents requestors of information under the California Public Records Act.  He can be reached at craig@craigalexanderlaw.com.