The cash-strapped Chicago Public Schools has filed a civil lawsuit against disgraced former CEO Barbara Byrd-Bennett and her associates at the SUPES Academy, seeking $65 million in damages and civil penalties for defrauding the school system.
The lawsuit, filed today in Cook County Circuit Court, comes a day after district officials asked principals again to curtail spending as the district tries to cobble together a pension payment that comes due in June. Schools already have undergone a series of mid-year layoffs, and now are looking at unpaid furloughs and still more cuts.
“With scarce resources, staff furloughs and painful budget cuts, CPS is keeping a close watch on every dollar,” CPS CEO Forrest Claypool said in a statement. “Barbara Byrd-Bennett and her co-conspirators knew the District’s dire straits and still concocted this scheme to divert needed resources away from classrooms and line their own pockets.”
Attorney Thomas Smith, who is representing Byrd-Bennett in the civil case, did not immediately respond to a request for comment Thursday.
The 17-page lawsuit names Byrd-Bennett, who pleaded guilty to a federal corruption charge for steering district contracts to SUPES in return for kickbacks, and Gary Solomon and Thomas Vranas, co-owners of SUPES and a related company, Synesi Associates.
CPS officials are relying on a state law that allows government agencies to sue individuals to recoup fraudulently obtained public funds — and ask for three times the amount of lost money.
In total, CPS spent about $16 million on contracts to SUPES and its related companies before cutting a contract in the midst of the federal corruption probe. The lawsuit also lists payments to Byrd-Bennett of about $900,000 for salary, benefits and other expenses while she worked for the district as a consultant, administrator and eventually CEO between 2012 and 2015.
Federal prosecutors indicted Byrd-Bennett, Solomon and Vranas in October. The case was sparked by an investigation by the CPS Inspector General, who started his own probe after a Catalyst report in 2013 questioned why CPS awarded a $20 million, no-bid contract to a former employer of Byrd-Bennett.
While Byrd-Bennett has pleaded guilty and is cooperating with federal authorities, attorneys for Solomon, Vranas and their companies remained in plea negotiations as of their last status hearing in January. The next hearing before Judge Edmond Chang is scheduled for March 23.
In the lawsuit, CPS General Counsel Ronald Marmer says the district has “made a good-faith attempt” to recoup the money spent on the contracts for SUPES and related companies since December. But, Marmer writes, instead of paying the money back, Byrd-Bennett and her co-conspiracies have spent money on lawyers “to insist that defendants’ ability to pay be kept secret from public scrutiny.”
The 10-count complaint also charges Byrd-Bennett and her co-defendants with civil conspiracy, breach of fiduciary duty, breach of contract and unjust enrichment.
Even if CPS were to win the lawsuit, it’s unlikely the district could recoup any cash from Byrd-Bennett and her SUPES co-defendants anytime soon — or in time to make a dent in the district’s current budget crisis. CPS needs to make a $700 million pension payment in June.