Ex-Chicago public schools chief to plead guilty in contract kickback scheme

CHICAGO — Former Chicago Public Schools chief Barbara Byrd-Bennett plans to plead guilty to federal charges that she steered more than $23 million in no-bid contracts from the school system to her previous employers in exchange for kickbacks that would have made her millions of dollars, federal prosecutors announced Thursday.

Zachary Fardon, the U.S. attorney for Northern Illinois, said Byrd-Bennett is cooperating with investigators and that her lawyer has indicated to prosecutors that she plans on soon pleading guilty to the charges. Byrd-Bennett, 66, who lives in Solon, Ohio, faces 15 counts of mail fraud and five counts of wire fraud.

The announcement came as Fardon announced the grand jury indictment against Byrd-Bennett, who left her post in a cloud of controversy in May, several weeks after news reports that federal authorities were investigating her and her former employers, the education training firms SUPES Academy and Synesi Associates.

"Graft and corruption is never a good thing, but it is particularly troubling when it impacts our schools, our kids," Fardon said. "Public servants and city vendors who conspire to violate the public trust in order to line their own pockets will be held accountable. Today's indictment reflects that accountability."

Byrd-Bennett had worked as a consultant for SUPES and Synesi before she was picked in 2012 by Chicago Mayor Rahm Emanuel to serve as the chief executive officer of the nation’s third largest city’s public school system. She previously had run the Cleveland and Detroit public school systems.

"I am saddened and disappointed to learn about the criminal activity that led to today's indictment of Barbara Byrd-Bennett," Emanuel said in a statement. "Our students, parents, teachers and principals deserve better."

No date has been set for an arraignment of Byrd-Bennett, and Fardon said it is not yet clear when she would enter her guilty plea.

SUPES, which is based in the nearby suburb of Wilmette, and Synesi in Evanston, Ill, were also charged in the indictment, as were the respective owners of the companies, Gary Solomon and Thomas Vranas.

The announcement of the charges come as Emanuel and the Chicago Teachers Union are deadlocked over contract negotiations, with the mayor calling on teachers to take a 7% pay cut. The school system is weighed down by a massive budget deficit and unmet pension obligations.

"The circumstances surrounding the indictment of the former CEO are unfortunate and mark a sad day for the leadership of our district," Chicago Teachers Union President Karen Lewis said in a statement. "While we wish Mrs. Byrd-Bennett well in her legal battles, the Chicago Teachers Union remains fully and unequivocally committed to securing a fair contract for our members and ensuring their ability to properly serve the public school students and families in the city of Chicago.”

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The companies planned to conceal some of the kickback money by funneling it into accounts set up in the names of two of Byrd-Bennett’s relatives, according to the indictment.  Solomon and Vranas allegedly presented Byrd-Bennett with two college fund accounts, each containing $127,000, that were set up for two of her relatives, according to the indictment.

The ex-CPS chief also had an agreement with the companies that called for her to be paid in the form of a “signing bonus” after she left CPS and the companies re-hired her as a consultant. The indictment also alleges that Solomon offered to arrange for jobs for friends of Byrd-Bennett in exchange for contracts.

Byrd-Bennett also received meals, an airplane ticket, and tickets to basketball and baseball games as part of the scheme, according to the indictment.

For her part, the former schools CEO worked hard to steer SUPES and Synesi business, including two major contracts in 2012 and 2013 that totaled $23 million to provide the district with leadership development services. The program was known as the Chicago Executive Leadership Academy.

She introduced a Synesi employee to an unnamed school system administrator to plan for an external school diagnostic review of a CPS school. On another occasion, she persuaded a vendor to the school system to serve as a sponsor of the SUPES Academy.

The indictment also alleges that Byrd-Bennett directed school system employees to find $450,000 to pay the SUPES academy for work it performed for CPS prior to it signing a contract in October 2012, and that she ordered another unnamed CPS employee to identify the superintendent as leading the procurement process for another contract in 2012-2013 school year that she wanted to steer to the SUPES Academy.

Fardon told reporters that Solomon and Vranas agreed to pay her a 10% commission for the contracts upon her leaving the school system.

Byrd-Bennett, Solomon and Vranas laid out their scheme in e-mails that were recovered by federal agents, according to the indictment.

“I have tuition to pay and casinos to visit (: [.],” Byrd-Bennett wrote in one e-mail discussing the kickbacks.

In one e-mail in late 2012, Solomon told Byrd-Bennett: “It is our assumption that the distribution will serve as a signing bonus upon your return to SUPES/Synesi.  If you only join for the day, you will be the highest paid person on the planet for that day.”

In another e-mail, Solomon wrote to Byrd-Bennett that the Chicago Board of Education Inspector General wanted to review Solomon’s and Vranas’s emails and that they planned to use a computer program to delete the emails. Solomon also advised Byrd-Bennett to delete her emails, according to the indictment.

Byrd-Bennett resigned from her post on May 29, weeks after it became public that federal authorities were investigating the schools chief and SUPES and Synesi.

Solomon, 47, of Wilmette, is charged with 15 counts of mail fraud, five counts of wire fraud, two counts of bribery of a government official, and one count of conspiracy to defraud the United States.

Vranas, 34, of Glenview, Ill., is charged with 15 counts of mail fraud, four counts of wire fraud, two counts of bribery of a government official, and one count of conspiracy to defraud the United States.

SUPES and Synesi are charged as corporate defendants with 15 counts of mail fraud and five counts of wire fraud apiece.