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FRIDAY Loser Pays by K. Lloyd Billingsley [commentator] 5/11/07

Late last month a jury here awarded $7.6 million to James Lindberg, a former California Department of Education employee the CDE punished for doing his job. The award is an increase of more than $3 million from the $4.5 million Lindberg got in 2002, and more reason why legislators should familiarize themselves with this case of waste, fraud and corruption.

During the 1990s the CDE under state superintendent Delaine Eastin was giving away millions in federal adult education funds to politically correct “community based organizations” that could not account for how they spent the money. The schools were in some cases open fields or empty houses. The money had been spent on such educational items as Mercedes-Benz automobiles. The fraud was blatant, but it took courage for investigators to blow the whistle.

The organization that got the most money was Hermandad Mexicana Nacional, headed by the late Bert Corona, a militant left-wing extremist who threatened investigators and complained about them to Sacramento politicians. These politicians then prevailed upon Delaine Eastin, a former Bay Area Democratic assemblywoman. She responded not by correcting the misconduct – some of the recipients have since been convicted of criminal charges – but by punishing the whistleblowers, James Lindberg and Robert Cervantes.

California's state auditor confirmed Cervantes' findings in a 1999 report that got little ink in Sacramento. In 2002, the CDE agreed to re-pay the federal government up to $3.3 million, a practical acknowledgment that the department improperly disbursed funds. (See "The Corruption Inherent in the System," Capital Ideas, September 25, 2002). The CDE statement said the agency "is not admitting any wrongdoing and, in fact, believes it acted appropriately."

A jury ruled that state ed boss Delaine Eastin had retaliated “with malice” against James Lindberg, a 20-year CDE employee and slapped a hefty liability judgment on her. The court also slapped a damage award against Joan Polster, Lindberg's immediate boss, now in charge of adult education with the Sacramento Unified School District.

The court's 2002 award of $4.5 million to Lindberg should have made it clear that the CDE had not, as it claimed, "acted appropriately." They could have stopped it there, owned up to their own misconduct, and put a halt to the waste. Instead they appealed and continued to spend more public funds to defend the department against its own employees for doing their job. While good for politically connected law firms, that is bad policy for California taxpayers and students. (See also "The Culture of Denial Continues in the California Department of Education, Capital Ideas, July 5, 2006")

By agreeing with James Lindberg and increasing his award to $7.6 million, the court essentially handed the department its head. But this is not end of story, even if the department appeals again.

Current ed boss Jack O'Connell made no move to stop the continued appeal after 2002 and has been rather silent about this case. Legislators and taxpayers have a right to know how much money the department spent on attorneys in a losing cause. That money will not be used in any classroom for the benefit of students. Legislators may want to hold hearings, which could pursue other key questions.

How many people, if any, were disciplined or dismissed for taking hostile action against CDE employees for the faithful performance of their duties in exposing fraud and corruption? How is it that those responsible for punishing whistleblowers so easily find other lucrative employment in the education system? Since the courts have again confirmed wrongdoing by the CDE, when will the department publicly own up to it? Does similar misappropriation of funds still continue in the adult education system? 

While they consider these questions, legislators may consider some larger issues. California was once a national leader in education but today ranks 46th and 49th, respectively, in basic math and reading. Yet the state's K-12 system still functions well as a mechanism for redistribution of wealth, often, as this case confirms, to people who have no claim on it. The corruption remains inherent in the system, along with mediocrity and failure. Any kind of leadership worthy of the name would do something about it. CRO

copyright 2007 Pacific Research Institute

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