Millions in Classroom Funds Embezzled by State Education Administrators, Media Silent

By Michael Shaw
August 10, 2003

While Santa Cruz County Schools wrestle with severe budget cuts, few have heard about a huge scandal in the state Department of Education that involved $20 million in fraud, $11 million of embezzled tax funds, harassment of whistleblowers, and a court order for Superintendent of Public Instruction Delaine Eastin to personally pay damages to the whistleblowers. This Stockton Record story by Steve Wampler exposes something that is potentially more troubling than having an education system that is mismanaged by corrupt administrators who absconded with millions in public funds for themselves and their friends: the media, particularly in Santa Cruz County, seems to have been an active participant in covering up for the Eastin administration. While the author calls his story “Shame o­n Eastin,” it might be better called “Shame o­n us California voters” for failing to monitor fraudulent use of tax dollars meant for our children’s classrooms.

Shame o­n Eastin: State superintendent leaves under a cloud

By Steve Wampler, My Voice
[Published January 5, 2003 in the Stockton Record]


It isn’t every day that a jury finds a California state constitutional officer has covered up millions of dollars of fraud. And it isn’t every day that such an official is ordered to pay damages from her own money.

But that’s what happened to outgoing state Superintendent of Public Instruction Delaine Eastin [in December], when a Sacramento County Superior Court jury smacked her and the state Department of Education with a $4.5 million judgment award to a whistleblower.

Most Californians will probably never hear the story of how the former Democratic assemblywoman tried to sweep more than $20 million in fraud under the carpet. By and large, the California press corps has been as quiet as church mice. Gov. Gray Davis has been totally silent o­n the matter.

Precious few stories have appeared about the scandal — and the subsequent vindication of several employees turned whistleblowers. There have also been few editorials. And o­nly o­ne newspaper — the Sacramento Bee — has distinguished itself with at least four stories o­n the issue.

To date, the San Francisco Chronicle has not carried a story. The San Jose Mercury News buried its Dec. 8 story o­n Page B10. The Los Angeles Times carried a Dec. 6 story in its education news. [Neither the Santa Cruz Sentinel nor the Register-Pajaronian mentioned the story.]

In a state with a two-year budget deficit that exceeds $40 billion, California’s taxpayers deserve more information about how millions of dollars in education money is being tossed down the sewer. During the 1990s, Eastin’s Department of Education gave away millions of dollars in federal adult-education moneys to politically correct, “community-based organizations” for English and citizenship classes.

In some cases, the schools were in open fields or empty houses. Money that was supposed to be spent for educational items went instead for Mercedes-Benz automobiles. Some money still can’t be found.

Investigators later found instances of embezzlement. To date, state education officials have been unable to account for $11 million in taxpayer funds.

During the recent trial, James Lindberg, a former adult-education consultant who worked for the agency for more than 20 years, said he brought his fraud findings to Eastin and other department officials. They attempted to “sweep them under the carpet” and demoted him to keep him from telling others, he said.

Lindberg told jurors that he later was given a “nonjob” and suffered two heart attacks because of his treatment at work. In April 2001, two other Education Department consultants, who stated that they too were whistleblowers, settled their lawsuit against Eastin and the department for $160,000.

Lindberg was backed up in his charges during the trial by former Assistant Superintendent Richard Cervantes, who acted o­n Lindberg’s complaints and was subsequently fired. “What went o­n is a violation of the public trust, and I wasn’t about to stand for it,” Cervantes said. In its Dec. 4 verdict, the Superior Court jury decided that Eastin had “acted with malice” and had “intentionally” retaliated against Lindberg for informing state and federal authorities about the Education Department fraud.

Lindberg was awarded more than $1 million in economic damages and more than $1.7 million in noneconomic damages. Eastin was determined to be personally liable for $1.375 million, and Lindberg’s boss, Joan Polster, for $412,500 in noneconomic damages.

Two days later, the same jury decided that Eastin should pay Lindberg $150,000 in punitive damages — this time out of her own pocket, a rare verdict against a high-ranking government official.

Last month’s story, sadly, is not the first time that the California media have virtually ignored sizable cases of education fraud under the Davis administration.

A year ago, Davis decided against holding the Los Angeles Unified School District accountable after it defrauded California taxpayers of $120 million. After checking L.A. Unified records, state Controller Kathleen Connell found the district’s attendance records so inflated that she ordered that $120 million be returned to the state.

Davis, in turn, forgave the fraud — and canceled the audit program that found it. The o­nly sure thing about education fraud in the Davis administration is that it will be with Californians for a while. Other whistleblowers have cases pending from the same scandal that are yet to come to trial.

Why care? Because not o­nly do taxpayers lose the millions of dollars in fraud, but they also pick up the tab for large parts of the damages won by the courageous whistleblowers who stood up for what is right.

As Lindberg looks at it, the lawsuit is not about him but about the corruption in the state Department of Education that continues today, even as California sinks further into its financial abyss.


About the Author

Wampler, a Tracy resident, hosts a radio talk show heard Sunday nights at 8 p.m. and Saturdays at 3 p.m. o­n KCBC (770 AM). He holds a master’s degree from the University of Kent in Canterbury, England.


In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes o­nly. [Ref.]

Millions in Classroom Funds Embezzled by State Education Administrators, Media Silent by Michael Shaw

Steve Wampler story originally published in the Stockton Record o­n Sunday, January 5, 2003.

This article contains links to outside sources not controlled by Freedom Advocates and therefore are subject to change.

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