L.A. school board member Ref Rodriguez faces conflict-of-interest complaint over $285,000 in payments
The charter school network that L.A. school board member Ref Rodriguez co-founded and ran for years has filed a complaint with state regulators alleging that Rodriguez had a conflict of interest when he authorized about $285,000 in payments drawn on its accounts.
Officials at Partnerships to Uplift Communities, or PUC Schools, filed the complaint Friday with the state’s Fair Political Practices Commission.
According to the complaint and documents reviewed by The Times, the vast majority of the money transfers that Rodriguez authorized and PUC has flagged went from school accounts to Partners for Developing Futures, a nonprofit under his control.
An attorney who reviewed the records for the school network said he has found little or no evidence so far of services provided for these payments.
“The payments were made in 2014, but do not appear to have been properly authorized,†said attorney Gregory Moser, whose firm was hired by PUC to conduct the investigation. “Nor are the purposes of the expenditures and benefit to the schools adequately documented, our investigation revealed.â€
PUC’s senior managers said they uncovered the transfers — made in a series of checks — while responding to questions and requests from The Times in compliance with the state’s Public Records Act.
The conflict-of-interest allegations could add to Rodriguez’s legal problems.
Last month, prosecutors charged him with three felonies and 25 misdemeanors for alleged money laundering in his school board campaign. Rodriguez is accused of soliciting people to give him donations and then illegally paying them back.
The FPPC investigates conflict-of-interest allegations against public officials, including charter school operators.
PUC officials have also informed the L.A. Unified School District, which has oversight responsibility for most local charter schools, the district confirmed Monday.
“As soon as we uncovered this information, we launched an internal investigation,†Manuel Ponce Jr., chairman of the school network’s board of directors, said in a statement. “We are taking this very seriously, and our commitments to our students, families and schools remains our highest priority.â€
Rodriguez did not respond to numerous attempts to contact him about the school payments. He also has not responded to requests to discuss the money laundering charges.
He resigned as school board president the week after he was charged in that case, though he did not give up his board seat. He is one of four board members who came into power with the strong backing of charter school supporters and who now make up a majority of the seven-member body.
In the world of charter schools, Rodriguez has been admired as a leader. The new allegations have sown doubts, including at the California Charter Schools Assn.
“The conflict-of-interest allegations against Ref Rodriguez are serious, and CCSA is very concerned about them,†Jed Wallace, the group’s president and chief executive said in a statement. “We commend PUC for transparently coming forward about these issues. CCSA expects that everyone connected to the charter-school movement conducts themselves with the highest standards of integrity and ethics.â€
Critics of charter schools called again for more regulation of these schools, which receive public funding but operate largely outside of a public school district’s control.
“This type of behavior is exactly why we continue to push for greater accountability and transparency among California charter schools,†said Frank Wells, spokesman for the California Teachers Assn. “This misuse of public funds is robbing students of resources they deserve.â€
Rodriguez no longer works at PUC; he gave up his job there when he joined the school board in July 2015.
On Friday, the school network accepted the resignation of his cousin, senior manager Elizabeth Tinajero Melendrez. In PUC records reviewed by The Times, Melendrez is listed as the person who requested eight of the checks Rodriguez authorized, adding up to nearly $188,000.
In its filing with the political practices commission, PUC contends that the payments to Partners for Developing Futures are a potential conflict of interest because Rodriguez appears to be on both sides of the transaction. PUC’s records indicate that he authorized and signed the checks. Tax filings from 2009 through 2012 — the last year for which one is available — and records that PUC provided from as recently as 2015, show that Rodriguez was the chief executive of Partners for Developing Futures.
Melendrez also is a defendant in the money-laundering case. Prosecutors have filed charges contending that she helped Rodriguez solicit and illegally reimburse the donations.
Her attorney, Mark J. Werksman, said his client has done nothing wrong. Regarding the transfers, he said Melendrez could not be held responsible because she had no authority either to approve the payments or force someone else to do so.
“Her role was purely secretarial in connection to these transactions,†Werksman said.
PUC operates 17 schools in Los Angeles and one in Rochester, N.Y. It is a nonprofit that operates under its own board, with L.A. Unified authorizing its local schools individually.
Rodriguez and PUC co-founder Jacqueline Elliot each had separate charter organizations, which they merged to form PUC Schools in 2004. After the groups merged, the co-CEOs divided up supervision by the regions in which they had already been operating. Rodriguez supervised the schools north and east of downtown; Elliott those in the northeast San Fernando Valley, PUC officials said.
Most of the checks to Rodriguez’s nonprofit — 11 of 14 — were written on two days, in June and October 2014, and coded as expenses at the six schools Rodriguez oversaw. The total was about $224,000, but each check fell below $50,000. That’s the threshold that would require approval by PUC’s board of directors, according to board rules provided to The Times by PUC.
Rodriguez signed all 14 checks, totaling more than $265,000 — but most also bear a signature or stamp of PUC’ s co-founder and co-chief executive, Elliot.
Elliot had no immediate explanation for her signatures except to emphasize how much trust she had for Rodriguez.
“You’re talking about someone who’s created opportunities for thousands of children and who demonstrated a commitment day in and day out to acting in the best interest of students,†Elliot said in an email. “Ref’s track record was unquestioned.â€
Elliot is one of the PUC officials who took responsibility for filing the FPPC complaint and notifying L.A. Unified.
“It is my obligation to do the right thing for everyone I serve,†Elliot said in a statement.
In documents provided to The Times, Rodriguez also co-signed two additional checks — for a combined $20,400 — to a company called Better 4 You Fundraising in the first half of 2014. In a candidate disclosure form he filed with the L.A. Ethics Commission in November 2014, Rodriguez disclosed that he owned a stake in that company.
It’s not clear when Rodriguez acquired a stake in Better 4 You Fundraising. It’s possible that he did not yet have an ownership interest when he signed the two checks.
During much of the period in which the checks were being written, Rodriguez had expanded authority over PUC’s finances, according to an employment history provided by PUC. After the school network’s chief financial officer left in July 2014, Rodriguez, who already was treasurer of PUC’s board, also filled in as chief financial officer.
During the same period, Elliot shifted into a role that gave her less day-to-day oversight over the school accounts. She became chief executive of PUC National, an affiliated nonprofit that provides human resources, financial management and other services to PUC Schools.
In 2009, tax records indicate that Rodriguez took charge of Partners for Developing Futures, according to records reviewed by The Times.
The nonprofit was started in Colorado in 2008, with the goal of developing new charter schools under minority leadership. Its board hired Rodriguez as president and CEO, and the nonprofit registered to operate in California in 2009.
Running PDF became Rodriguez’s full-time job, for which he earned as much as $180,000 a year, according to state filings. At PUC, he moved to part-time status, and his annual pay rate ranged from $35,000 to $105,000, according to PUC.
From its start through 2012, PDF reported revenue of more than $7.9 million, nearly half of which it spent on grants to charter school operators. At the end of 2012, the nonprofit reported holding close to $2.2 million in assets.
What happened to PDF and its assets from that point on is unclear. Several times over the next four years, the state requested mandatory filings. Partners for Developing Futures either did not provide them or provided incomplete information. In 2015, the state suspended the nonprofit. Then in 2016, it revoked PDF’s registration to operate in California.
The documents accompanying PUC’s FPPC filing include a “memorandum of understanding†between the school network and Partners for Developing Futures in which the nonprofit was to develop and test materials to prepare people for leadership positions in charter schools. The agreement bears the signatures of Rodriguez and Elliot, but neither is dated and the contract contains no fee schedules or budget.
“Although the agreement called for the creation and implementation of a leadership development program beginning in 2012, it is believed that the agreement was not presented to PUC or executed until 2014,†PUC officials wrote in their FPPC filing.
PUC has had problems related to financial management in the past.
In late 2014, the state investigated conflicts of interests in PUC’s food contracts, which prompted L.A. Unified to open its own probe. As a result, a senior PUC executive left under pressure in May 2015, the month that Rodriguez was elected to the school board.
Although L.A. Unified’s inquiry never officially closed, it appeared to be winding down. Now, L.A. Unified investigators will be returning to PUC with new questions.
The renewed attention could put PUC and its leaders at risk because L.A. Unified has forced some charters with financial irregularities to close and demanded that others make sweeping changes in their senior leadership.
On Monday, the local teachers union repeated the call it began making soon after Rodriguez was charged in the money-laundering case.
“Ref Rodriguez should resign immediately,†said Alex Caputo-Pearl, head of United Teachers Los Angeles.
Twitter: @howardblume
Times staff writers David Zahniser, Joy Resmovits and Anna M. Phillips contributed to this report.
ALSO
Ref Rodriguez, facing criminal charges, resigns as L.A. school board president
Janitors who vouched for Ref Rodriguez in school board race are named in his money-laundering case
Enrollment drops even more than expected in L.A. Unified
California’s high school exit exam is officially a thing of the past
UPDATES:
6 p.m.: This article was updated with comments about the allegations.
This article was originally published at 12 p.m.
Sign up for Essential California
The most important California stories and recommendations in your inbox every morning.
You may occasionally receive promotional content from the Los Angeles Times.
