November 5, 2015
Did Houghton Mifflin Harcourt bribe the corrupt former head of Chicago Public Schools?
by Liam O'Brien
Another week, another alleged fraudster siphoning huge sums of ill-gotten cash out of the book business. At this point, MobyLives readers may be experiencing deja vu—and that’s perfectly understandable. But for all the doomsaying and hand-wringing about the financial state of the book business, these stories serve as reminders that an industry that survives is an industry that may inevitably suffer from corruption and graft.
In any event, this week’s story involves Barbara Byrd-Bennett, the disgraced former head of Chicago Public Schools (CPS).
Following a federal probe into mismanagement of school funds, Byrd-Bennett recently pled guilty to one count of wire fraud. She stood charged with awarding $23 million in no-bid CPS contracts to her former employer, the education consulting firm SUPES Academy.
The government claimed that the secret relationship between Byrd-Bennett and SUPES involved multiple kickbacks, including college funds for Byrd-Bennett’s grandsons and a lucrative job guarantee for herself once she left CPS. SUPES’ owners, Gary Solomon and Thomas Vranas, pled not guilty to federal fraud charges. Byrd-Bennett is expected to testify against them if their cases go to trial.
These recent events have pointed to alleged corruption of the same stripe that supposedly occurred during Byrd-Bennett’s previous tenure as chief academic and accountability auditor for Detroit Public Schools (DPS), while the city was being run by emergency manager Robert Bobb. It was in Detroit that Byrd-Bennett first began working with Solomon and Vranas, whose companies were awarded $3.4 million in contracts before Byrd-Bennett left the DPS.
And now, for those of us in the book biz, comes the kicker: Recently uncovered FBI documents indicate that Byrd-Bennett may have been colluding with yet another former employer—Houghton Mifflin Harcourt. Jon Siedel, Dan Migalopoulos, and Lauren Fitzpatrick reported for the Chicago Sun-Times:
An FBI agent believed corrupt former Chicago Public Schools CEO Barbara Byrd-Bennett worked to “fraudulently steer” a $40 million contract to one of the country’s biggest educational publishers while she worked for the Detroit schools, according to records obtained by the Chicago Sun-Times.
The court documents obtained Monday also show federal law-enforcement authorities suspected two aides who later worked for CPS helped Byrd-Bennett to rig the bidding process in Detroit in favor of Boston-based Houghton Mifflin Harcourt.
In a sealed affidavit from 2013, FBI Special Agent Joseph Richard Jensen told a judge that he believed Byrd-Bennett and her two assistants had collaborated with HMH executive John Winkler to ensure that $40 million in federal stimulus funds would be directed to HMH for the purchase of textbooks for DPS, circumventing the bidding process. Before her tenure at DPS, Bennett-Byrd had worked at HMH as a “superintendent in residency,” earning an annual salary of $155,000. According to the FBI, after Byrd-Bennett left DPS, she was re-hired by HMH to work 21 hours per week for $182,000 a year.
In his affidavit, Jensen claims that Byrd-Bennett’s emails indicate that she and her assistants rigged the request for the proposal process months in advance to favor of HMH. And that’s not all:
The feds told the judge an ‘unusual financial transaction’ took place about three weeks before the contracting process for the Detroit deal began. Records show the FBI’s ‘analysis of bank account belonging to Barbara Byrd-Bennett shows a deposit into her Money Market account on July 20, 2009 in the amount of $26,530.26 from ‘Houghton Mifflin Harcourt.’
Byrd-Bennett’s legal team and HMH declined to comment for the Sun-Times article, and while it’s important to note that no charges have been filed against anyone in the Detroit investigation, the FBI refers to the probe as “ongoing.”
Over the course of her employment in two cities, both rife with financial malfeasance and mismanagement, Byrd-Bennett may have broken the public’s trust for personal gain. However, it would be naive to believe that her actions are exceptional. As the scope of the investigation widens, and the cases against Solomon and Vranas move forward, a reasonable person would be right to expect that this story is far from over.
Liam O'Brien is the Sales & Marketing Manager at Melville House, and a former bookseller.