School District Sues in Bid-Rigging Scandal

The Orange Unified School District filed three civil lawsuits Wednesday in Orange County Superior Court in an effort to recover $689,000 lost to the district during an alleged contract-rigging scheme that ran from 1979 to 1984.

The civil suits seeks to recoup the money from a former school district official, his wife, several contractors--including two previously indicted on criminal charges--as well as from five insurance companies.

The civil suits are in addition to criminal charges already pending against former school district maintenance officer Steven Presson; his wife, Diane Elizabeth Presson, and the two former Orange contractors, William A. Gustafson and Ronald Brock.

The Orange County Grand Jury last year indicted the four on charges of theft of public funds.

According to court documents, Steven Presson and the two contractors are alleged to have secretly arranged for school-district construction and repair contracts to go to selected companies in exchange for gifts and kickbacks.

The Pressons, Gustafson and Brock are scheduled to face a preliminary hearing in the criminal charges on Oct. 17.

All four were named in the civil suits filed Wednesday in Santa Ana. Also named as defendants in the lawsuits are four construction companies alleged to be “dummy bidders� in the scheme. They are Hoskins Construction, Jasmine Construction, MacDonald Construction and Hopper Construction.

No criminal charges have been filed against the construction companies.

Five insurance companies alleged to have held the performance bonds for the contract work were also named in the lawsuits. They are Balboa Insurance Co., Surety Insurance Co. of California, Carlisle Insurance Co., Capital Bond and Insurance Co. and Allied Fidelity Insurance Co.

For the first time, the lawsuits provide a firm figure on what the school district believes it lost during the contract scandal. Earlier, unofficial loss estimates have ranged as high as millions of dollars.

Josie Cabiglio, spokeswoman for the school district, said the $689,000 total was reached after a review of the projects involved during the alleged bid-rigging period.

Orange Unified is a sprawling central county district that includes all of Orange and Villa Park, parts of Anaheim and Santa Ana, plus large sections of unincorporated county areas.

The school district last year hired a Santa Monica lawyer, Judy W. Seaman, to try to recover money lost through the contracts. Seaman’s office Wednesday notified the district that she had filed the civil lawsuits that day.

According to sworn affidavits filed in Orange County Superior Court in 1986, the bid-rigging scheme involved Steven Presson’s telling selected contractors how much to bid on certain school district repair jobs. The affidavits said Presson then asked the contractors for money or favors, such as work on his home.

The affidavits say $2 million in contracts were involved during the alleged scheme. But the documents never disclosed how much money was actually lost to the school district.

The civil lawsuits allege that during the period, some of the contract work either was not in compliance with district specifications or was not done at all.

Orange Unified School District Supt. John Ikerd said “substandard contracting� was responsible for the loss of the $689,000.

Non-criminal charges of “willful misconduct� were lodged by the Orange County Grand Jury against four Orange Unified school board members in 1987 in the alleged rigging. The grand jury said the alleged rigging took place because the members did such a poor job of overseeing the district.

One of the board members, Eleanore Pleines, resigned shortly after the accusation. The district attorney subsequently dropped the charge against her.

Charges against board members Ruth C. Evans, Joe Cherry and Robert J. Elliott were dropped on a technicality Nov. 13.