Conflict of Interest on Champaign School Board: Contracts go to Chalifoux's Husband

Why are our School District's tax dollars going to support her husband and business associates?

Not surprisingly the News-Gazette has endorsed one of their own, incumbent Kristine Chalifoux, to serve on Champaign's Unit 4 School Board for a second term. The Unit 4 Candidate has made a substantial profit from School District funds over the four years she has held her position.

If voters compare her views before she announced her candidacy back in 2005,

and in 2006,

So, it might confuse voters as to why Incumbent Chalifoux has built her Board credentials on just the opposite after taking a seat as a Champaign Unit 4 Board Member.

At Thursday night's PTA candidate forum, a question was asked to all School Board contenders, “Have you or any member in your household ever had or currently has any contract with the school district Unit #4? If so, what was the contract for and the amount of the contract?“

Incumbent Chalifoux gave a resounding, “NO!” and qualified that denial with admitting though her husband's company had contracts with Unit# 4, neither of them were stakeholders or owned shares of that company so that doesn't really count as a Conflict of Interest.

Actually, Incumbent Chalifoux purposefully misled the citizens of Champaign with that denial not only about the position her husband holds in Facility Dynamics Engineering Corporation (FDE), the company receiving contracts from the school district, but failed to mention she was on the selection committee who reviewed the companies vying for the bid that selected Facility Dynamics Engineering Corporation (FDE). Incumbent Greg Novak, who sat on the Facility Planning committee that chose FDE, attempted to defend co-Incumbent Chalifoux when it was time for him to answer the question by adding, “If a member has a Conflict they would abstain from voting a contract approval.“

Well, in fairness to Incumbent Chalifoux, she did abstain through both years of contracts. Contracts that were awarded to her husband, Alan Chalifoux Principal Engineer at FDE, in the amount of $390,465 with additional “open pocket book“ for charges incurred by FDE as the project advances, things like lunch for the engineers working on site with no fixed amount or per diem, and other perks not normally awarded to vendors. However, simply “abstaining“ without full disclosure of why you are abstaining is a violation of the act itself. Incumbent Chalifoux did not state her reason for abstaining either year her husband's company was awarded his contract.

[See the Unit 4 School Board contract with FDE. The Scope of Services section is on FDE letterhead which lists Alan Chalifoux's contact information, and that section is signed by him.]

Facility Dynamics Engineering Corporation (FDE) is a questionable company whose most recent incarnation of incorporation was 2004 in the State of Texas. In the two states of incorporation (Texas and Maryland) FDE does not hold a certificate of “Good Standing“. The Corporate Office of FDE is located 6760 Alexander Bell Drive, Columbia, MD works much like a Mary Kay/ Amway/Shaklee type company in certain ways. FDE headquarters acts as the bank and insurer led by Jose Santos who also is an engineer. Santos cut his teeth by working the very profitable minority contracts network in the government sector around the Washington DC area. He got his FDE idea in 1989 and began to recruit engineers around the country, offering them the backing for a percentage of the profits. This works well for all parties. Principal Engineers at the local levels avoid ownership issues (like Conflicts of Interests) and Santos doesn't have to do the on-site work responsibility and only has to keep the Corporation in Good Standing and money available. The benefit to the local Principal Engineers is that they have the capital to start on the projects they negotiate. When a contractor begins work, they are using their own resources, short-term bank loans (if credit allows) to hire the work force needed and to sustain supplies and overhead costs associated with the project until funds are released by the person, group or institution that hired the Construction or Engineering firm/company. Those who can't afford the upfront capital and bonds to insure performance can start or not stall, simply can't compete for the larger contracts, or contracts of any kind. Santos acts as the banker/frontman in that regard.

As P.E. for FDE, Alan Chalifoux hires sub-contractors of various qualifications and specialties as needed, and solely by his own discretion. Alan Chalifoux pays all of the vendors and overhead and is solely accountable for that spending as well as any additional requests for funding said project.

Originally FDE recruited Larry Lister, an Engineer living in Urbana to have a satellite office and run the business for Champaign County and nearby counties but in Illinois engineers must be licensed by the State and Lister has no license to practice as an Engineer in Illinois so he then recruited his colleague, Alan Chalifoux who does hold an Illinois license as an Engineer. The two of them became friends back when they both worked for Construction Engineering Research Laboratories (CERL).

Incumbent Chalifoux and husband Alan have managed to place themselves on every facilities planning committee in each school their children attended in the Champaign Unit #4.

Once elected in 2007, Kristine Chalifoux immediately put herself on the Districtwide Facilities Planning committee and pushed for air conditioning for each school. Incumbent Chalifoux's husband's companies, ETA Engineers

and now Facility Dynamics Engineering (FDE) were built on electrical and mechanical engineering 'shoehorning' modern air conditioning, plumbing, smoke control...

Candidate Chalifoux was employed with Architectural Spectrum (ASD) during her first term on the Unit 4 School Board while her husband Alan Chalifoux managed his engineering company, ETA Engineers located 44 Main St. STE 402, Champaign, IL (incorporated June 7, 2000 and Dissolution December 13, 2006) [see the ETA Articles of Incorporation, showing Alan Chalifoux as incoporator]

Devonshire is an important player in Incumbent Chalifoux's portfolio and her working relationship and business associations may find another Conflict of Interest as our District moves into choosing a site for the New Central High School.

Here's why: in 1977 George T. Shapland and Thomas E. Harrington founded Devonshire Realty. That eventually became part of the Devonshire Group, which has architectural, engineering and title insurance businesses in addition to its real estate business. The company recently got out of the residential real estate business but continues to offer commercial real estate services.

Along the way, the Devonshire Group acquired both Architectural Spectrum (ADS) (Kristine Chalifoux), ETA Engineers (Alan Chalifoux) renaming it ETA Engineers of Illinois and made it a limited liability company, as well as owned Coldwell Banker Commercial Devonshire Realty, Associated Capital Mortgage, Associated Capital Title, HDC Engineering and Devonshire Randolph Engineering.

http://devonshiregrp.com/history.htm

http://www.news-gazette.com/news/business/miscellaneous/2009-01-14/two-champaign-engineering-firms-set-join-together.html

Shapland also has interests in Worden-Martin, is president of Shapland Management Co. and serves as a director of First Busey Corp. and sits on the board of directors for The News-Gazette Inc.

Incumbent Chalifoux's intimate connections with Shapland will explain how the News-Gazette endorsed all three candidates (Novak, Chalifoux and Grey) back in 2007 for their vocal opposition to renewing Superintendent Culvers contracts without more careful consideration for his work performance and all vowed not to follow in the footsteps of those decisions.

http://www.news-gazette.com/opinions/editorials/2007-04-13/novak-chalifoux-bambenek-grey-champaign-board.html

So naturally we weren't surprised when these same three candidates who are now incumbents and actually did approve renewing contract after contract and additional oversized benefits to an already overstuffed wallet the Superintendent was pocketing, that the News-Gazette didn't criticize or remind us of that little fact even when they wrote about the Superintendent trying to run out of town before the House of Cards crashed in around him.

http://www.news-gazette.com/opinions/editorials/2011-04-01/our-choices-unit-4-schools.html

Devonshire holdings are managed by Jeffrey Tock, a partner in “Harrington and Tock” law firm. It should be well noted this firm's areas of practice are: Civil Litigation, Condemnation and Eminent Domain, Construction Law, Real Estate Law, and Zoning, Planning & Land Use.

When you go to the polls on April 5th keep in mind that if you select Incumbent Kristine Chalifoux you are also giving Alan Chalifoux (FDE), George Shapland, and "Harrington and Tock" another opportunity to control where our tax dollars go and putting their point person in a position of power to keep that control and who will vigorously defend those bids and approval of.

http://www.news-gazette.com/news/education/2008-06-04/obscure-new-rule-forcing-district-rebid-projects.html

An Incumbent who has consistently been the watchdog on companies not held by The Devonshire Group and who advocates for conservative fiscal spending solely with those few who have made a choice not to be absorbed into the power hoarding Corporation.

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Chalifoux board_minutes_2011-02-14.pdf109.77 KB

Why Am I Not Surprised?

Yeah, if you want to know what's really going on in local politics, don't expect to find it in the News-Gazette.

Then there is their support of gutting the county auditor of any effective oversight of county finances.  If Laurel Prussing and Rick Winkel agree that taking this choice away from the voters and giving the county board the right to appoint their own overseer of the county's business practices, do you really think it's a good idea?

But an appointed, rather than elected, auditor will make it that much easier for the News-Gazette to tell people what is important, set the people's agenda, and suppress the inconvenient truths about government in Champaign County.

The News-Gazette -- what you read if you want a selectively ignorant start to your day.

auditor

nightwatch has the Prussing/Winkel position backwards. They favor an elected auditor.  The N-G wants an appointed one.

Better Wording

No, not backwards, but perhaps more ambiguously worded than ideal. How about this:

If Laurel Prussing and Rick Winkel agree that taking this choice away from the voters and giving the county board the right to appoint their own overseer of the county's business practices is a bad idea, do you really think it's a good idea?

Conflict of Interest on Champaign School Board

Greg Novak here

 

Point 1: In the last four years on the School Board, every member of the School Board has abstained on one item or another where a possible conflict of interest might be seen. I abstained early on in my term when the district signed off on a contract with the Pearson group - whom I worked for as a test grader prior to my election to the Board. Ms. Chailfoux was very open with the School Board with the fact that her husband's company was seeking a contract - which was awarded per the bid process.

 

Point 2: I have yet to vote for an extension of Arthur Culver's contract. I have been open on the fact that other then a starting Superintendent having a five year - Superintendent contracts should be limited to three year contracts. No newly elected School Board should be be in a situation where their term of office is shorter then the Superintendent's - its negates the ability of a School Board to effectively exercise this duties of oversight.

Conflict

The Board is accountable to the public because it is an elected body.  Mr. Novak, it's good to know Chalifoux was open to the Board that approved the bid and not the taxpayers of Unit 4. Simply stating the Board knew in closed session does not comply.  One of the reasons there are procedures by Ethics law is to prevent any appearance of Conflict of Interest. In addition, your role as a "test grader" has very little to do with the role Mr. Chalifoux had in the contracts negotiation with FDE or the decision making authority his position holds.  It is rather insulting to the readers in this forum for you to compare such a disparity.  In your Pearson group role, I am fairly sure you did not have your name on that multi-million dollar company letterhead nor signed any contract other than yours with the Pearson Group accepting the "work-for-hire" employment and doubt very seriously if your role as a "test grader" had an impact on whether the District was purchasing books and products from the Pearson Group, who probably have been suppliers to the District for decades, or at least before you got on the Board. FDE was established in 1989.  Did they have any business with the District prior to Kristine Chalifoux becoming a Board Member?  Or did FDE suddenly appear once you and Ms. Chalifoux got on the Facilities Planning Committee? A committee that only the two of you served on if the minutes from 2010 are accurate.  In Chalifoux's contract, the address on the letterhead is both Kristine and Alan's home address.  If Mr. Chalifoux's office is in his home then that begs other questions, perhaps better asked by the IRS to determine which part of their house, electric, water etc is used solely for the "business".

Why now?

Ok, I get that it is "election season". But it really turns me off when I see folks bring out the dirt right before an election. 14 of the 16 articles/documents quoted within this piece of research are over 1 year old, and of the two "recent" references one was just a few days ago and could easily be eliminated as a supporting case.

 

Do not get me wrong, I really appreciate that someone is looking for facts and connections, doing the hard work of "investigative journalism", especially in the overarching context of an independent media outlet. But this isn't the way to do it, in my opinion. Playing to people's emotions is just a dirty trick.

 

@Anon 8:22pm: You raise some very valid points. And those are good questions. But to what purpose? For instance, how does this article and the ensuing comments help us as a community improve? I ask in complete sincerity, not mocking nor wishing to pick a fight. I want to learn.

 

-- charles schultz

Why Not Sooner?

Can't say I was ever a fly on the wall there, but one would think that many of the facts cited were well-known at the News-Gazette. Apparently they decided not to discuss this matter. So the more important question as far as timing is why the issue has been studiously avoided by the local fish wrap for so long?

The answer most likely is that Chalifoux is on the "right" side of the News-Gazette. They never expressed much concern about corruption in Illinois -- except in Chicago -- before George Ryan went down.

Of course, the "appearance of impropriety" is a pretty high bar in Illinois. Corruption in both major parties is endemic and profound. The public's interest be damned. Unfortunately, In Illinois the stench often reaches down to the local level, where people often ask "But to what purpose?" would anyone bother bringing something like this up...

And then those being discussed cruise to re-election, when common sense tells us that something is very wrong with that.

Maybe people did ask before

Maybe people did ask before. It seems to me that sometimes asking for answers to questions gets sort of like a dog chasing it's tail. I know I have asked quite a few times for information from the School District and they take their time, like months and months to answer. Then when they give answers it's not the ones that were originally asked. I know that Climate Study took a year of lots of people asking and then after the News-Gazette asked, it still took another year for it to finally get released. At least I think it's out. So I disagree with Mr. Schultz. I would think with all of the information written here it would have made more sense to have released it sooner to give more people time to read and absorb it. I know it took me a couple of days. But whether it's a couple of days before the election or after, I think the points made here are well worth asking. Whether improprieties are yesterday or a year from yesterday, does that make them any less improper or do we simply void our public interest warranty with anything that happened if it didn't happen within 30 days from the time of delivery?

What's your point?

Charles Schultz asked about the usefulness of news that was a year old? If not mistaken, it seems that February 2011 the Board gave Facility Dynamics Engineering another $90,000 without going through the bidding process because of some legal leg that says they can with a current vendor if they want to extend their contract. Wouldn't that make the original contract from a year ago still current because it is being used as the foundation for the additional work mentioned in the February 2011 Board Minutes?

But It really turns me on

"But it really turns me off when I see folks bring out the dirt right before an election."

How do you know these questions weren't asked before? Or how would someone be in a position to have asked if only the board were privileged to know the relationship of a district contract and a board member and this was not mentioned in the minutes or in an open public board meeting?

"Ms. Chailfoux was very open with the School Board with the fact that her husband's company was seeking a contract - which was awarded."

Mr. Novak justifies everything is above board because Ms. Chalifoux disclosed such an important fact to the elected group of their board behind closed doors?

So Mr. Schultz was correct: "I really appreciate that someone is looking for facts and connections, doing the hard work of 'investigative journalism'."

And that comment speaks volumes because someone had to dig on their own to unbury facts instead of taxpayers voluntarily told.

The "Dirty Tricks" Mr. Schultz mentioned seems more appropriately defined when reading two different years of minutes where a very large contract was awarded for 3 different schools and at no place in the minutes do we know that Facility Dynamics is Alan Chalifoux, Kristine Chalifoux's husband. A simple public "abstention" does not allow the public watchdog to ask the important questions in a timely manner.

So I disagree with Mr. Schultz, I would rather read the information now or at anytime it is found, instead of not at all.

Abstention was a meaningless gesture?

On February 14, 2011 School Board Minutes it appears the entire meeting was in violation?

The meeting begins with Kristen Chalifoux seconding the general approval of the Agenda to be voted on:

"Approval of Agenda Member MacAdam moved, with a second by Member Chalifoux, to approve the agenda. The motion carried on voice vote."

Then Kristine Chalifoux votes to approve all of the Expenditures for 2011/2012, one being the the contract amount (included within the$1,242,997) for $90,680? Or was this for the amount being paid under the previous payments which including those made to FDE?

"Action Agenda Proposed Fund 61 Expenditures for 2011/2012 (Exhibit “A”) Member Novak moved, with a second by Member Lanesskog, to approve the proposed Fund 61 expenditures for 2011-12 in the amount of $1,242,997. The motion carried on roll call. Ayes 7. Nays 0."

So exactly how does a person who voted to approve items under the general heading of "Action Agenda" items, then abstain when one of those Action Agenda items is specifically called?  This seems confusing.

"Commissioning Services Contract(Exhibit “C”) Member Grey moved, with a second by Member MacAdam, to approve the contract with Facility Dynamics Engineering in the amount of $90,680. The motion carried on roll call. Ayes 6. Nays 0. Abstained 1. Member Chalifoux abstained."

The public comment does not seem to appear before the votes or on the Feburary 14, 2011 agenda at all. So even if someone caught this on this second year of contract approval by FDE, when could they have called it into question?

(5 ILCS 420/3‑202) (from Ch. 127, par. 603‑202)

 (5 ILCS 420/3‑202) (from Ch. 127, par. 603‑202)
    Sec. 3‑202. When a legislator must take official action on a legislative matter as to which he has a conflict situation created by a personal, family, or client legislative interest, he should consider the possibility of eliminating the interest creating the conflict situation. If that is not feasible, he should consider the possibility of abstaining from such official action. In making his decision as to abstention, the following factors should be considered;
    a. whether a substantial threat to his independence of judgment has been created by the conflict situation;
    b. the effect of his participation on public confidence in the integrity of the legislature;
    c. whether his participation is likely to have any significant effect on the disposition of the matter;
    d. the need for his particular contribution, such as special knowledge of the subject matter, to the effective functioning of the legislature.
    He need not abstain if he decides to participate in a manner contrary to the economic interest which creates the conflict situation.
    If he does abstain, he should disclose that fact to his respective legislative body.
(Source: Laws 1967, p. 3401.)

Taxpayers pay 1% increase from last elections referendum

Taxpayers pay 1% increase as a result from last elections referendum that were designated for the Garden Hills and BTW projects.

 

C. Municipal Code—Conflict of Interest Statute, 65 ILCS 5/3.1-55-10.

1. Application: applies only to municipal officers. 65 ILCS 5/3.1-55-10(a).

2. General Prohibitions: Interests in Contracts. A municipal officer cannot have a direct or indirect interest in:

  • (a) whenever the cost of such contract, work, business, or article is paid either from the treasury of the municipality, or
  • (b) by assessment. any contract, work, or business of the municipality; or the sale of any article,

Whenever the cost of such contract, work, business, or article is paid either from the treasury of hte municipality or by assessment

And you are...what's the word I'm looking for?

Oh, yeah -- helpful.  Thanks 10:23 post.  You have made the point even more valid.  So, maybe you can answer why the letterhead of Facility Dynamics has the Chalifoux's home address preprinted alonside the preprinted Maryland corporations.

And, I think it has been made clear on other repsonses that the information is actually 1 month and 20 days (February 14, 2011 School Board Minutes) and the other information is background.  The contract from May 10, 2011 for FDE was "extended" to include the Carrie Busey $90,000 approved on February 14, 2011 which makes the May 10, 2011 original contract approval still active as of February 14, 2011.

Correction May 10, 2010 (not May 10, 2011)

And you are...what's the word I'm looking for?

Submitted by anonymous on April 5, 2011 - 10:52am.

Oh, yeah -- helpful. Thanks 10:23 post. You have made the point even more valid. So, maybe you can answer why the letterhead of Facility Dynamics has the Chalifoux's home address preprinted alonside the preprinted Maryland corporations. And, I think it has been made clear on other repsonses that the information is actually 1 month and 20 days (February 14, 2011 School Board Minutes) and the other information is background. The contract from May 10, 2010 for FDE was "extended" to include the Carrie Busey $90,000 approved on February 14, 2011 which makes the May 10, 2010 original contract approval still active as of February 14, 2011.

 

Smart One

Post 10:23 Did you mean "State's Attorney Julia Rietz"?

I am fairly sure she has no legal obligation or jurisdiction to advise a municipal office holder, unless they commit a crime that falls under her scope of prosecutable responsibilities.

However the State's Attorney does have an obligation and jurisdiction to give opinions to any County officer upon request and provides interpretation of the law relating to concerns of the County.

abstention is acknowledged--was conflict announced?

I'd like to draw Mr. Novak's attention to the fact that Mrs. Chalifoux's abstentions are acknowledged in the article. The real question, which he has not answered, is: Did Mrs. Chalifoux announce, IN THE OPEN MEETING, the reason she was abstaining on either vote? Or did she merely state she was abstaining when the roll call vote was taken?

I have never been an elected official, and have not taken the state ethics training my neighbor (a county board member) sat through last summer. But it is my understanding that if an elected official has a conflict of interest on a matter in front of the board that s/he serves on, said member must state conflict so that audience can hear it and it can be recorded in minutes for posterity. Did this action occur, and if not, why not? What are she and rest of board hiding?

Another thing that bothers me as I read this article: Savoy school and BTW are new schools. Garden Hills is an addition/remodel. I don't know who supplied HVAC to Savoy and BTW, but shouldn't that contract also include the services FDE is being paid for? If the HVAC contract didn't include the services, was price of equipment/installation reduced by appropriate percentage? If price was not reduced, then taxpayers have been gouged twice, by a board that likes to portray itself as "fiscally responsible."

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