Getting Rich from the Public Schools in San Antonio

by Lady Justice

Former Harlandale ISD board member Joshua Cerna was sentenced in June 2018 to a year in a halfway house and ordered to pay more than $40,000 in connection with an FBI investigation into millions of dollars in rigged insurance contracts at other area school districts and at the now-defunct Bexar Metropolitan Water District.

Cerna, 44, pleaded guilty in September 2016 to a charge of conspiracy to commit honest services wire fraud, admitting he helped corrupt the insurance company selection process at San Antonio, Edgewood and South San Antonio Independent School Districts.

“They corrupted the contracting process of four different government agencies, It’s always been our position that if you’ve been convicted of public corruption, you have to go to jail.” – U.S. Attorney Roomberg

A veteran of local politics, Cerna served 11 years on the Harlandale school board. He also worked as a vice president of government relations at the Mullen Group and used his connections to help bring more business to Mullen and his then-wife, Diane, the chief executive officer.

And now the fallout and consequences has begun. After a Texas Education Agency Investigation they are recommending that Harlandale Independent School District’s board of trustees should be removed and replaced by a state-appointed board of managers. One of several School Districts in the San Antonio area that are now being investigated.

At a meeting Monday, the board discussed the report’s findings, which harshly criticized the district’s financial practices, called its governance “dysfunctional” and recommended lowering its accreditation. The document has not been publicly released but has circulated on the cellphones of district insiders.

 

The trustees and Superintendent Rey Madrigal might have committed crimes in actions involving contracting, procurement and secret meetings, according to copies of the report obtained from two individuals who were not its original recipients.

 

The report said Madrigal and his predecessor, Robert Jaklich, both told the TEA that they were threatened at one point with losing their jobs — Jaklich by a current and a former trustee, both unnamed, and Madrigal by the owner of a company that oversaw district construction projects.

 

Before the board went into executive session, district resident Gina Castañeda accused trustees of not taking the investigation seriously and of deflecting responsibility.

 

“With all this that’s going on with TEA, I know that you have attorneys looking out for your best interest, not for the schools’, the students’, the parents’ and the community’s best interest,” Castañeda said.

 

“Let TEA clean house. Don’t fight it and spend the kids’ money,” she said.

 

The board later voted to hire an additional lawyer to work on its response to the report.

 

Madrigal declined comment. Board president Juan Mancha said after the meeting that he doesn’t believe that the board should be replaced and that he’s not aware of any indictable offenses by trustees since 2013, when he was elected to the board.

 

“I’m confident in myself. I cannot speak for my colleagues,” he said. “I’m confident that we shouldn’t (be replaced).”

 

Mancha declined to comment about specifics in the report but said the board will make its rebuttal to the TEA public when it submits it Friday.

 

“We want to be transparent, and we’re prepared to be transparent,” he said.

 

If the report’s recommendations for a state takeover of the district survive a review that Harlandale trustees voted last month to seek, Monday’s meeting might be the board’s last. Similar investigations preceded state takeovers of the boards of the Southside and Edgewood ISDs in 2016. A decision to do so rests with Texas Education Commissioner Mike Morath.

 

But the TEA review, which the district’s lawyer said will be requested by Friday, will keep the report from becoming final until about mid-January, say state education officials, who have declined to comment on its contents until then.

 

Until Mancha’s comments Monday, trustees and Madrigal also had declined to comment on the report except to say, at a special called meeting days after receiving it, that they disagreed with its findings.

 

TEA officials launched the investigation in August 2017, saying it was in response to complaints about governance, contract procurement, and alleged nepotism and conflict of interest.

 

Allegations of nepotism were not substantiated or could not be determined because of “a lack of documentation available for review,” according to the report. However, “significant dysfunction exists among board of trustees in the form of distrust, in-fighting and bullying, biased bid ranking and alliances among the trustees,” it states.

 

The preliminary report said Madrigal might have violated state law when he entered into agreements with an engineering company and approved payments to it without board approval. Trustees failed to monitor the district’s finances and to ensure that the superintendent properly maintained financial procedures and records, the report said.

 

The TEA recommended an independent forensic audit of district finances to be conducted at the district’s expense.

 

Additionally, the report says trustees conducted meetings through group text messages, in violation of state open meetings law.

 

Some trustees have acted outside their scope of office by directing the reassignment of certain employees, and some attempted to intimidate district personnel for the trustees’ own benefit, the report states.

 

“The former superintendent, who resigned effective close of business Aug. 31, 2012, informed the TEA that he was threatened by one former and a current (trustee) with the loss of his job if he would not follow their directive” to fire a midlevel executive, the report states. It did not name the former superintendent, Jaklich, who left Harlandale to become superintendent of the Victoria ISD.

 

The investigation was prompted by “multiple complaints” about Harlandale ISD, the report states.

 

Harlandale trustees voted in January, with little explanation, to end the district’s contract with Jasmine Engineering to oversee construction work authorized by voters through bond programs. They included trustees who had stood by Jasmine Azima, its owner, through years of criticism that the board wasn’t seeking competing proposals for the lucrative work.

 

The report noted that the company’s relationship with the district had lasted since 2006 and that its latest contract had no end date and had been amended six times.

 

“The current superintendent informed the TEA that he was threatened by Jasmine Azima that he would lose his job if he did not support her as the district’s project manager,” the report stated without saying when the alleged threat occurred. It said the TEA’s Special Investigative Unit asked to interview Jasmine Azima but she “declined to be interviewed on the advice of her attorney.”

 

Attempts to reach Azima were unsuccessful, but Colin Strother, a spokesman for Azima, denied Madrigal’s allegation “100 percent.”

 

He added that “it never happened.”

 

A lawsuit the company brought against the district over the contract termination is pending.

 

Board member Carlos Quezada didn’t attend the meeting, having resigned Monday in preparation to be sworn in Jan. 1 as a newly elected state district judge on a bench that handles juvenile cases in Bexar County.