Last November, local citizens voted to do what state lawmakers wouldn’t: shut down a failing government bureaucracy.
New allegations of corruption at the scandal-plagued bus agency Dallas County Schools provide more evidence that voters made the right decision.
The latest scandals to rock the school bus service provider, now in the process of a state-mandated dissolution, are part of a complex web of corruption that enriched a handful of government officials and contractors at taxpayers’ expense.
Corruption coupled with financial mismanagement led to DCS’s “ultimately debilitating” $130 million in debt.
The most serious corruption charges relate to a criminal money laundering conspiracy. FBI investigators uncovered $3 million in bribes and kickbacks allegedly paid to former DCS Superintendent Rick Sorrells by Robert Leonard, CEO of Louisiana-based school bus stop-arm camera company Force Multiplier Solutions.
A failed stop-arm camera ticketing scheme hatched by Leonard and Sorrells, who was head of DCS when deals with Force Multiplier were approved, cost Dallas County taxpayers over $70 million and precipitated the agency’s financial collapse.
Sorrells and Leonard have not yet been charged, but Leonard’s associate Slater Swartwood Sr. is pleading guilty to federal money laundering conspiracy charges and will testify to details of the multi-year conspiracy as part of his plea deal.
Federal prosecutors say Swartwood was the middle man who helped funnel millions of dollars in bribes and kickbacks from Leonard and Force Multiplier to an unnamed DCS official – assumed to be Sorrells – “in return for further agreements and camera-equipment orders.”
According to FBI documents, between 2011 and 2016:
“Person A [Leonard] paid Person B [Sorrells] over $3 million in bribes and kickbacks, including paying a portion of Person B’s credit card debt and student loan debt arising from his son’s college tuition. In return, Person B, acting on behalf of the state agency [DCS], entered into contracts and licensing agreements with Company A [Force Multiplier], which resulted in the state agency paying Company A over $70 million and incurring significant and ultimately debilitating debt…
“To further disguise and conceal the source and purpose of the bribe and kickback payments… the coconspirators, at various points during the money laundering conspiracy, created sham loan, consulting, or real estate agreements in an attempt to make the payments appear legitimate.”
One of those “sham” real estate agreements in the DCS-Force Multiplier money laundering scheme may be a controversial “sale-leaseback” land deal brokered by Swartwood. In 2015, Wedgwood Investment Group LLC bought four service centers from DCS for $25 million in cash that the agency desperately needed, then leased the land back to DCS at an estimated cost to taxpayers of $47 million.
Swartwood was paid $750,000 for the transaction – $555,000 from the buyer Wedgwood, plus $195,000 by the seller DCS. Swartwood acknowledges that Leonard got him involved in the deal as a “consultant;” Leonard describes Swartwood as his “personal real estate consultant for over 40 years.”
Wedgwood also has ties to Chicago-based Equipment Leasing Group of America (ELGA), which leased millions of dollars’ worth of equipment to DCS for its failed school bus camera scheme. Last April, DCS solicited the vendor for donations to a local charity headed by then-Superintendent Sorrells, persuading ELGA to give $50,000 to Sorrells’ White Rock Lake Foundation. It’s unclear why a company in Illinois would want to donate to a Dallas park.
Sorrells wasn’t the only agency official getting money from contractors.
Former DCS board president Larry Duncan received nearly $250,000 in campaign contributions from Leonard and others connected with Force Multiplier during the same time Swartwood admits the money laundering scheme was underway. The timing of the donations appears to coincide with the board’s consideration of agreements with Force Multiplier.
Duncan claims the donations were legitimate, but as with the out-of-state vendor’s donations to Sorrells’ charity, it’s unclear why Louisiana residents would contribute to the campaign of a Dallas bureaucrat running unopposed. Duncan later gave some of that money to campaigns of other DCS board candidates, including Omar Narvaez, who’s now a Dallas City Council member.
As recently as last April, Force Multiplier also gifted Duncan with a lavish trip to New Orleans, complete with luxury hotel, fine dining, and casino chips, according to emails obtained by NBC 5 Investigates.
An internal report commissioned, then suppressed, by the now-disbanded DCS board revealed much of the corrupt activity that’s come to light since the vote to abolish the agency. Alan King, CEO of the dissolution committee appointed to wind down the agency, released the report a day after the group first convened on November 15, saying he wanted to “make sure we are transparent.”
Voters have been proven right in their decision to abolish the corrupt bureaucracy, but it could have been shut down sooner – and without costing taxpayers an extra $1 million in election expenses.
State Sen. Don Huffines (R–Dallas), who led the effort in last year’s legislative session to shut down DCS, knew the agency wasn’t just failing students and taxpayers due to financial mismanagement and corruption. Parents and educators were concerned that the bus service’s safety and reliability had dropped, even as school districts were seeing their cost per student double. Yet Democrats led by Dallas-area State Sen. Royce West insisted on amending Huffines’ bill, punting the decision to voters.
Huffines now says the latest allegations and criminal charges are “just the beginning of what you are going to hear. I think the tentacles of this corruption run wide and deep.”
Huffines added that the DCS shutdown vote and prosecutions show that corrupt government officials “can be held accountable, need to be held accountable, and will be held accountable to the taxpayers.” Dallas County voters did their part.