The Olchefske files

A burglary at School District offices fuels critics' fire.

One fact has been established: Someone broke into the Seattle School District administrative offices over the Fourth of July weekend. The burglar then proceeded to the office of the district general counsel, scattering legal files around the office.

Since then, two documents purportedly stolen in the break-in have been making the rounds among critics of the district. A pair of candidates for the Seattle School Board—Martin Ringhofer and David Blomstrom—have highlighted the burglary and documents in their campaigns.

The first of the two supposedly purloined letters is a confidential memo on district letterhead from former general counsel Michael Hoge to the School Board. Dated March 6, 1996, the letter informs the board that Joseph Olchefske (now superintendent, but at the time the district's chief financial officer) has discovered that several million dollars from two levies had been improperly spent on staff salaries. Such funds can be spent on salaries, but only for jobs directly related to capital projects—a connection that the memo indicates was too tenuous in several cases.

In an interview last week, Olchefske confirms the legitimacy of the actual memorandum and the information contained within it. He hastens to add, however, the memo is hardly damning to the district. When he was hired as chief financial officer by former superintendent John Stanford, he says he created standards with the help of the state auditor's office to govern which salaries could be paid from capital funds. In reviewing the district's previous budgets, says Olchefske, "it certainly became clear to me that I was uncomfortable with the district's existing practices as far as what costs were attributable to the general fund and what costs were attributable to the levy funds."

The memo also states that after an estimate is made as to the exact amount of improper fund diversion, the levy money would be repaid. "Eventually, of course, the district's handling of the matter will be subject to scrutiny by the state auditor, and probably by the press," the memo reads.

In person, Olchefske confirms that the money was repaid from the district's general fund but says that the local media never expressed any interest in the matter, even though it was discussed in open School Board sessions.

The state auditor seems to have taken a similarly disinterested attitude. The matter isn't covered in the 1996 state audit of the Seattle School District. And, according to the auditor's spokesperson Mindy Chambers, the district isn't required to report the problem to the state. Chambers explains that even if the auditor discovered the improper diversion of funds, there would be no penalty—the only requirement would be that the levy money be repaid.

District critics respond that the fact that "several million dollars" in voter-approved levy funds were spent improperly is in itself an indictment of the district's lax financial procedures. Longtime district critic Linda Jordan notes that the memo identifies the 1991 technology facilities levy as a major source of the misappropriated funds. As the dearth of computer equipment in the new Ballard High School has become a major media issue, she argues, how can people ignore this evidence that technology funds were spent without proper oversight?

The final sentence of the memo doesn't inspire confidence in the district, either. "You will soon receive a 'non-privileged' memo from the superintendent in which he informs board members of his plan to review the appropriateness of capital projects fund expenditures," wrote Hoge. "We seek to create a favorable paper trail in order to be able, if necessary, to 'play back' effectively in the future how the matter was responsibly handled." Or, in English, Stanford was going to "announce" a coming review of the issue, then feign a startling discovery about the improper use of funds and rectify it—certainly an odd bit of playacting for an apparently straightforward matter.

While Olchefske had no comment on Hoge's "play back" plan, Jordan was outraged.

"It's clear when reading that letter that the district's intent from the very beginning was to cover this up," she says, vowing to investigate if money was stolen from the district. "The diversion of funds betrays the trust of the public—which voted this money to pay for capital improvements and computer technology."

The second letter purported to be taken in the burglary hasn't received as wide distribution: It appears to be from Hoge to the attorney of a district employee accused of sexual misconduct, outlining the conditions for that person's return to work. This letter, perhaps a draft, isn't on district letterhead or signed.

Olchefske says he still doesn't know what papers, if any, were stolen from the general counsel's office. "We're as confused as everyone else," he says.

As for who burglarized the School District's office and why, rumors persist that the break-in is related to financial improprieties in the district-run SPICE senior meal program. The program's secretary, Laura Gauntlett, was convicted of numerous counts of theft last December but skipped her sentencing hearing and remains at large.

And unless School Board candidate Martin Ringhofer has his way, the issue is likely to fade away. Even Ringhofer's press release headlined "Financial Reward for the successful conviction of burglars and recovery of stolen files from Seattle School District legal offices" isn't likely to do the trick. A close reading of the press release reveals that the candidate isn't putting any money on the line—he simply thinks the district should be offering "a substantial financial reward" for recovery of the lost files.

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