Posted 7-28-02

Last December, Grade the News awarded this “To reporters Chuck Finnie and Julian Guthrie, photographer Deanne Fitzmaurice and the San Francisco Chronicle for a surprising investigation of what happened to millions of dollars of bond and tax funds squandered by officials of the San Francisco Unified School District. The series began Nov. 11 and concluded on the 13th. There have also been follow-up stories since as school officials reacted to the investigation.”

The articles took first place for a series at the 2002 Peninsula Press Club Awards dinner in May. In April, the Hearst Corporation bought a double page ad in Editor & Publisher magazine to crow about the series. “San Francisco schools were neglected by city officials, but not by the newspaper,” the ad proclaimed.

The series told a “shocking” story, it continued. “Reaction to the Chronicle’s series and editorial was swift. The new school superintendent announced a radical overhaul of the division that was involved. Stricter oversight of how the district spends bond money was proposed to voters. The schools stopped using school repair money to pay for salaries.”

But while the Hearst Chronicle was accepting praise and heaping it upon itself, activist parents and the new administration were seething. The newspaper, they said, was taking credit for investigations and reforms the school district initiated before the series was published.

The controversy prompted the dialogue below. The first column is a critique of the series researched and written by several members of the schools’ PTA (parent-teacher association). The second is a response by lead Chronicle reporter Julian Guthrie. The third column holds GTN’s response to the most central points raised in columns 1 and 2:

The Critics The 9 Worst Problems with the Chronicle’s “Expose” on San Francisco School Bond Money 1. The Chronicle and the Hearst Examiner all but ignored the problems while they were going on. The post-merger Chronicle reported on them only after new school district leadership had revealed and taken vigorous steps to address the problems. Many members of the school community spent years begging the newspapers to cover the problems while they were occurring. Had the newspapers revealed the problems at the time, mismanagement could have been stopped. Now the series casts blame on the reformers instead of the culprits. And it may well make it impossible to pass further bond issues. If that happens, it’s San Francisco’s schoolchildren who will suffer. The headline on the first part of this series perfectly describes the Chronicle’s coverage: “ ‘A grave injustice against the children.’ ” 2. The series promotes the view that mismanagement is hopelessly entrenched in the school district. It uses many quotes indicating that the problems are beyond repair, without countervailing views from the many voices in the school community who express optimism about the district’s new leadership. The definitive quote – the kicker, or last line, of the last part of the series – reinforces that view: “The problem with moving forward is that the mistakes and abuses of the past are very much alive." The quote is from Nancy Wuerfel, a neighborhood activist whose cause is rebuilding Parkside. She’s a community-spirited person informed about her cause, but is not a parent, an educator or otherwise involved in other aspects of the district. She is not an authoritative enough voice to appropriately provide a damning assessment of current leadership in such a defining spot. 3. The series, and follow-up stories, repeatedly assert that bond money was “diverted” to “ill-conceived projects.” The series gives almost no detail on “ill-conceived projects,” but cites in passing two new schools, Tenderloin Community and John O’Connor High School. Yet Tenderloin Community is widely viewed as a groundbreaking resource for an extremely disadvantaged community, while John O’Connor High is regarded as a rare resource for students seeking vocational education. The only detail about what would be “ill-conceived” about the schools is that they are currently underenrolled, which is not uncommon for new schools. It’s revealing that the series singles out schools that serve very disadvantaged students to assail as “ill-conceived.” 4. The series notes that SFUSD overall has more classroom space than it needs, partly in implying that Tenderloin Community and John O’Connor were “ill-conceived.” Yet it criticizes delays in building a new school at the former Parkside School site in the middle-class Sunset District. Parkside is in an area that already has far more classroom seats than students, yet the series implicitly supports a new school there. This raises the question of whether the Chronicle supports schools serving middle-class populations but views money spent on schools serving disadvantaged communities as “diverted” to “ill-conceived projects.” 5. The series repeatedly blasts the use of bond money to pay salaries, but never makes clear whether or when that’s appropriate, illegal or improper. Superintendent Ackerman’s investigation found that it’s appropriate to use bond money for salaries directly connected with bond-funded projects. The series is incomplete without further detail. 6. The series describes how the school board allowed mismanagement to occur – but singles out only veteran board members Jill Wynns and Dan Kelly for criticism. Kelly and especially Wynns were the longtime challengers to discredited former Superintendent Bill Rojas, criticizing his unaccountable spending and calling for fiscal responsibility. Yet the series castigates Wynns and Kelly for insufficient effectiveness, while neglecting even to name the members of the board majority who supported Rojas and rubber-stamped his proposals. 7. Meanwhile, the series treats former school board member Leland Yee (currently city supervisor and Democratic Assembly candidate) as a heroic fiscal watchdog, though he was no more effective than Wynns or Kelly in halting mismanagement. The long description of Yee’s actions in supposedly trying to force accountability aggrandizes Yee while omitting his obvious motivation, which was to distance himself from his own background as an eight-year school board member in preparation for his Assembly run. Since Yee defeated Dan Kelly in the March 2002 Assembly primary, the December 2001 series appears to have been conveniently timed to promote Yee’s candidacy. (Kelly entered the race late, after the series appeared, but was well known to be preparing to run.) 8. The story mentions prominently that bond money was used to fund a “sprawling bureaucracy,” but gives no further details whatsoever of whether SFUSD’s administration is excessively large or costly. 9. The series declares that bond money was spent on “work never authorized by voters”: The wording clearly implies wrongdoing, but the series never explains whether use of bond money is properly limited to the projects originally listed. If another need arises or circumstances change, is a school district locked into the originally stated uses? If another need arises, is it legal and appropriate to use bond money? The wording above lumps this with wrongdoing, but is it? The series doesn’t tell us. ** No one who has followed San Francisco school issues would dispute that bond money was mismanaged for many years – though not as badly as the Chronicle implies. The Chronicle series is fatally flawed, especially in its strong implication that current district leadership is to blame for the problems and is impotent to remedy them. It amounts to an attack on the 60,000 schoolchildren who will suffer if voters reject future bond issues because of this shoddy, biased and incomplete piece of reporting. ##

Julian Guthrie Chronicle Staff Writer I've heard these things many, many times before (from the same people), but will try to respond yet again. Be reminded, however, that the critiques come from paid and/or elected defenders of the public school system. They have a political agenda, which is to make the school district look at good as possible. I too am a believer and supporter of public schools (as is my colleague Chuck Finnie). But, unlike the critics, I believe that it is necessary and beneficial to scrutinize a troubled system. The Chronicle series that Chuck and I did was thorough, exhaustive and revealing. It also prompted reforms.  I would make one suggestion, and that is for the school board members, officials, followers and full-time defenders to begin focusing their energies on making sure this never happens again, rather than continuing to cover up for past mistakes. To respond, briefly, to some points made: 1. The Chronicle and The Examiner spent considerable time and energy covering SFUSD fiscal and management problems. Beginning several years ago, I did a series of stories that uncovered serious fiscal mismanagement. Those stories included, but were not limited to, incredible amounts of overtime paid to school janitors and a sewing machine repair lady who was paid, year after year, despite the fact that the district had long before discontinued sewing programs. The Chronicle and the Examiner chipped away at the fiscal problems. Sometimes, though, it is not possible to see abuse or mismanagement until a few years later. The bond spending is one such case. We would not have been able to do much on where the money was going then. We had to look at what was promised, give them time to deliver, and once they had failed to do so, take a look at what happened.  That's what Chuck and I attempted to do. We wanted to look at exactly what had been accomplished and what wasn't. 2. The district is mired in problems. A new administration is trying to correct them. We will see if they succeed. The problem with believing that this administration will reform the district is that other administrations have promised exactly the same thing. The district deserves a chance, and it's getting one, but it also deserves continued scrutiny. The press plays an important role in making sure this public institution is serving the public. When teachers are paid next to nothing and kids are without basic textbooks and materials, and yet lavish new schools are being built, something is awry. 3. Read the series. We did a great amount of research and reporting. We explain why the projects didn't live up to their billing. The projects went tens of millions of dollars over budget; were built at a time of severely declining enrollment; and enroll significantly fewer students than promised. Again, all of this happened while teachers were out on the street panhandling for money to buy classroom supplies. 4. There is no point in responding to this. It is an implication without merit. 5. We made it very clear when it's okay to use bond funds to pay salaries. We interviewed dozens of officials at other districts. Nearly all said they do not use bond funds to pay salaries. Period. We talked to lawyers. We went back to look at the text of the ballot measures. We conveyed when it is legal, when it is questionable and when it goes against public will (i.e. the public's view of where the funds are intended to go). After the series appeared, the district said it would stop using any bond funds to pay salaries. So, that was one of a series of reforms that came out of the stories. 6. Wynns and Kelly have been the longest serving board members. They were around when the funds were being spent. They did ask questions but didn't effectively pursue answers. We gave them proper credit for asking the questions. 7. This question doesn't deserve a response, except to say we have no alliance with Yee. We pointed out he was on the board at the time. He has since tried to bring attention to problems. That's how we portrayed him. 8. We researched SFUSD compared to other districts and made a reference to the size of the administration in Fresno Unified, a district of comparable size. It has a significantly smaller central administration. This was supported by documentation, including an audit of the district by FICMAT. 9. The series clearly shows what was promised and what was delivered. Voters believed they were approving the funds for very specific things. Some of those projects were completed, others weren't. The Chronicle stands by its series. It was an important service to readers. Public agencies must be accountable. SFUSD was a system that lacked accountability. We hope that is changing.

Grade the News The critique on the left was not produced by anyone on the payroll of the San Francisco Unified School District, nor are they School Board members. They are parents of children in the public schools. 1a. Which came first: the Chronicle series or the school reforms? Arlene Ackerman became Superintendent of San Francisco Schools in August, 2000. In November, she and the school board commissioned Arthur Anderson to audit the Facilities Department --the part of the school administration in charge of construction projects such as those approved in bond measures. In May, 2001, Ms. Ackerman publicized parts of the audit showing improper allocations of bond funds and invited investigations by the FBI and City Attorney to determine whether mismanagement extended to outright fraud. She outlined a series of reforms suggested in the audit. On September 7, the superintendent announced a plan to reimburse the bond fund for money spent on salaries rather than the construction promised in the 1997 bond measure. On Nov. 11, the Chronicle series began. It appears the school district revealed problems with how some bond money was spent and began reforms before, rather than in response, to the Chronicle series. However, Julian Guthrie broke the story of the Anderson audit results on March 29, 2001. Undoubtedly this report added support for reform. 1.b Did the Chronicle and Examiner ignore the bond problems until after they had been solved? Ms. Guthrie’s claim that sometimes “it is not possible to see abuse or mismanagement until a few years later” in reference to bond mismanagement is plausible. But it appears to be contradicted by her own reporting. The second part of the three-part “Broken Promises” series leads with the sentence: “The warning signs were there for years. “San Francisco voters approved hundreds of millions of dollars in bond and tax funds, but repair, modernization and construction projects promised by school officials were not getting done.” These problems shouldn’t have been difficult to spot. As Ms. Guthrie and Mr. Finnie report in the same story: “Parents, teachers and neighborhood activists complained. An independent audit found incompetent district staff, weak financial controls and wasteful contracting practices.” Critics actively attempted to interest the press. A column by Chronicle columnist Debra J. Saunders in May of 2001 stated: “Kelly and Wynns [School Board members Dan Kelly and Jill Wynns] got wise to Rojas [former SF School Superintendent Waldemar “Bill” Rojas] and his free-spending ways before he left the district. They tried to stop the types of practices the FBI and city attorney now are investigating. The two even came before the Chronicle editorial board in 1999 to take on Rojas for buying a $7.8 million building the school district didn’t need.” On the other hand, Ms. Guthrie and Mr. Finnie examined thousands of pages of school district documents going back to 1988. It’s easy to understand the chagrin of Superintendent Ackerman and the PTA over the timing of “Broken Promises.” But the public is better off getting such an accounting late than never. 2. The series does take a pessimistic view of the new school administration. But it doesn’t blame Ms. Ackerman for misspending bond money. The role of the Ackerman Administration in uncovering and publicizing past problems is submerged under repeated references to the Chronicle’s “six-month investigation.” In fact, the Chronicle relied on the new administration’s investigation for much of its data. In her response, Ms. Guthrie is right to be skeptical--it’s a prime journalistic virtue. But it’s cynical to cast the new administration in the mold of the past when Ms. Ackerman has begun her term by calling for outside investigation and replacing top financial personnel. If not for the public’s sake, for its own sake, a dominant metro paper like the Chronicle must be careful not to feed public cynicism about government institutions; it chokes the civic impulse that generates a newspaper’s most loyal readership. 3. The series conveys the impression that as much as $100 million of bond revenues were misspent. In part one, the Chronicle reported: “Records show San Francisco Unified School District used as much as $100 million of the bond and tax money to support a sprawling bureaucracy and to finance ill-conceived construction projects that ran far over budget or were never mentioned to voters” (italics added). These are very strong words for reporters to use; they aren’t attributed to any source. “We’ve never been able to account for that $100 million figure,” says Sarah Hart, the chief financial officer Superintendent Ackerman hired to put the district’s books in order. But, Ms. Hart concedes, the Chronicle analysis went back to 1988, further back than she delved. Still, she’s skeptical. Virtually everyone GTN spoke with acknowledges that some money was indeed squandered. But those within the Ackerman Administration argue that most of the $100 million went to personnel and projects the schools needed and would have funded out of other parts of its budget had the bond money not been available. Says Dan Kelly, a school board member since 1991: “You wouldn’t have any idea [from reading the series] that seven brand new schools were built and others renovated.” Kelly agrees that some bond money was spent on schools not mentioned to voters in the bond proposals. “But there’s nothing illegal in [spending bond dollars on] these schools in response to community requests. There were lots and lots of hearings about that. Schools can change direction to greater need as long as they do so publicly.” 5. Was the use of bond money for salaries overplayed? Of the questionable $100 million, most went to salaries. The school district says most of those salaries paid for oversight of approved bond construction. If they didn’t come out of bond money they would have to be paid for elsewhere in the budget. The series implies that such spending was wrong. The fact that Ms. Ackerman has reimbursed the construction funds for some of those personnel expenses--and did so before the series was published-- weighs in the Chronicle’s favor. It also makes intuitive sense that when the public votes for a bond issue, it gets what it pays for, rather than something different. Finally, the Chronicle cites a warning by a financial consultant hired by the schools that administrative charges were too high. Perhaps the series portrays a complex problem as black and white. But the issue of paying salaries with money voters were told would repair and build schools, certainly deserved ink.

GTN did not have the resources, nor top school administrators the stomach, to reconstruct the Chronicle’s reporting. So any conclusions must be tentative.

However, it appears that the Chronicle: 1) was late to the party; 2) pushed the negative to--or perhaps beyond--the limit of available evidence in its interpretation of bond fund allocations; 3) took considerable credit properly belonging to the Ackerman Administration for uncovering and seeking remedies for problems with bond funds; and 4) failed to give enough credit to the new administration’s investigations and reforms.

On the positive side, “Broken Promises” brought wide public attention to serious structural problems in the Facilities Department and in accountability for the city’s public schools generally.

It’s important to note that the Chronicle didn’t break faith with the public by mishandling bond funds. School officials did that.

It may be true that voters will need time and reassurance from outside auditors that San Francisco Unified has put its house in order before they approve another bond measure. But as a result of the Chronicle’s series it’s now more likely that the district will tighten accountability. It will have to in order to regain the public’s trust. That’s not necessarily a bad thing.

Posted 7-28-02