Political Leaders Engineered State Control of Oakland Public Schools

OUSD was required to borrow $100 million when they only needed $37 million

Assemblymember Sandré Swanson pressured state schools’ Supt. Jack O’Connell for 3 years, resulting in return of local control

By Ken Epstein

State control of the Oakland Unified School District has changed its form over the years since the takeover in 2003 but remains a constant presence in determining policy in the public school system.

When the state fired Oakland Schools Supt. Dennis Chaconas and suspended the Board of Education in June 2003, some of the outlines of state control soon became clear: school closures; attempts to sell school property to real estate developers; the rapid growth of charter schools; and the lease of school sites to charter schools.

FCMAT was led by Tom Henry and Joel Montero. Randolph Ward, a graduate of Eli Broad’s superintendent training program, became the district’s first state administrator.

While the state administrator ultimately was removed in 2009, a state trustee with power to rescind the district’s financial decisions remains in place.

When the district became aware that it had overspent its budget in 2003, the OUSD administration developed a plan to maintain local control, which included borrowing money from funds paid to the district to partially reimburse OUSD for school construction projects.

The district’s plan was to repay the money over time into its construction fund.

“The use of the (reimbursement) money in this way was approved by OUSD’s bond attorneys, who happened to be the bond attorneys for the State of California, and expert in their field,” according to Jesse Douglas Allen-Taylor, writing at the time for the Berkeley Daily Planet.

Rather than approve borrowing and repayment plan, then County Supt. of Schools Jordan asked for an opinion from State Attorney General Bill Lockyer, who declared the plan illegal and blocked OUSD from using the money to balance the budget.

“In a mass community meeting later held at Allen Temple Baptist Church, Ms. Jordan defended her actions by saying that she could not allow the bond transfer because it was illegal,” according to Allen-Taylor.

When Jordan ran for reelection, she was criticized by her opponent Newark Superintendent of Schools John Bernard for her role in the takeover.

Of course, the bailout came in after the state took over, and therefore the state-appointed administrator – in consultation with his bosses- was in charge of how the money was spent.

Many people said that “Mr. Perata was the driving force behind the 2003 state seizure of the Oakland public schools,” wrote Allen-Taylor.

The political maneuvers behind the state takeover were suggested in an Oakland Tribune article written by then Tribune staff writer Robert Gammon, now editor of the East Bay Express.

“(Some) say office and cell phone records obtained by the Oakland Tribune provide evidence the takeover, and the resulting loss of local control of Oakland’s schools, was politically orchestrated,” Gammon wrote.

“The records show top officials from the Bakersfield-based Fiscal Crisis and Management Assistance Team (FCMAT) called Oakland Mayor Jerry Brown, the office of state Sen. Don Perata, D-Oakland, and then-Compton schools chief Randy Ward at least 40 times each in the months before the takeover,” according to Gammon.

Brown and Perata had publically supported a takeover during the preceding year. They voiced support for “placing Ward and FCMAT in charge of the school district,” wrote Gammon.

In the six months prior to the takeover, the records show FCMAT officials did not call Supt. Chaconas or school board President Greg Hodge, according to the Tribune.

“FCMAT (pronounced fick-mat) was supposed to be our fiscal advisers,” Hodge told the Tribune. He and Chaconas said FCMAT officials did not return their calls for months.
“They were supposed to be helping us. But instead they turned this into a political campaign to take over the district,” said Hodge.

Sheila Jordan in an interview with the Post disputed those who said the takeover was political.

The district wanted to borrow from its school construction funds to pay off the shortfall, she said. “Many districts do that understanding that because those funds were passed by the voters to update and build schools, districts by law must establish their ability to repay what is a short-term loan.”

“Oakland did not have anywhere near the revenues to repay the loan. The hole in their budget was $27 million,” Jordan said.

“The investigation discovered a plug in the budget. It rolled over into the following year and resulted in close to a $65 million deficit,” she said. “I never did understand why the loan was $100 million.”

The analysis of the district’s finances was conducted by School Services of California, the Fiscal Crisis Management and Assistance Team (FCMAT) and Alameda County Office of Education “working together at the table,” she said.

“The Trib(une) reporting at that time was upholding a theory of action that was wholly discredited by the facts produced by the fiscal experts,” said Jordan.

Disagreeing with Jordan was Lewis Cohen, who served as an assistant superintendent in Dennis Chaconas’ administration at the time of the takeover.

“The 2003 state take-over was a largely political process. The $100-million-dollar loan was concocted by then County Superintendent Jordan’s experts and put into legislation by Senator Perata, as she seems to have conveniently forgotten,” he said.

“Without Mr. Swanson’s dogged persistence on the Oakland school issue (for) three years, it is probable that local control would still be years away,” he wrote.

“(State Supt. of Public Instruction) O’Connell gave every indication that unless he was forced to do so under pressure, he would hold onto the Oakland schools.”