L.A. Unified says PUC Schools should have unearthed alleged Rodriguez conflict three years ago

The leaders of a local charter-school network are under fire from the for not uncovering and reporting conflict-of-interest allegations against school board member Ref Rodriguez three years ago.

The district has sent Partnerships to Uplift Communities, or PUC Schools, a sternly worded Notice to Cure, demanding that school administrators explain why it took so long to come up with and report its allegations that Rodriguez, its co-founder, authorized and signed $265,000 in checks to a nonprofit under his control.

The district authorizes and oversees most local charter schools, including all 17 that PUC operates in Southern California.

L.A. Unified administrators also question the time lag in reporting a separate possible conflict related to checks for about $20,000 that were allegedly signed by Rodriguez to Better 4 You Fundraising, a private company that organized fundraisers for schools. Rodriguez later disclosed that he owned an interest in this company, though it’s unclear whether he did so at the time the payments were made.

The district’s action raises the level of scrutiny for PUC, which this month confronted the difficult task of turning in to the state’s Fair Political Practices Commission a conflict-of-interest complaint against Rodriguez, a beloved figure to many at the schools he helped start.

Through a spokeswoman, PUC board President Manuel Ponce Jr. and network co-founder Jacqueline Elliot have denied any wrongdoing on the part of the organization. Elliot signed the FPPC complaint as a witness and also alerted L.A. Unified of the money transfers from PUC to the nonprofit, which is called Partners for Developing Futures. Rodriguez headed that nonprofit in 2014, at the time the payments were made, according to documents released by PUC.

The conflict allegations are just one part of Rodriguez’s troubles.

In an apparently unrelated case, Rodriguez faces three felony and 25 misdemeanor counts, alleging campaign money laundering when he ran for his board seat. Rodriguez pleaded not guilty to those charges in court last week and, through his attorney, denies all wrongdoing related to his campaign and any actions involving PUC Schools. Rodriguez left PUC in July 2015, when he joined the L.A. Board of Education.

The new warning notice from the district faults PUC, alleging fiscal mismanagement, conflicts of interest, failure to provide information and poor governance and leadership. The notice is dated Oct. 23 and was released to the Los Angeles Times and radio station KPCC in response to public-records act requests.

In its notice, L.A. Unified directs PUC by Wednesday to provide a long list of documents, including a timeline of the internal investigation that led to the conflict-of-interest filing with the FPPC.

The school system has some key documents already because earlier this month Elliot provided records detailing the alleged conflicts to L.A. Unified — and PUC officials have pledged their full cooperation with any follow-up investigation. Elliot has said that PUC learned of the payments in question when it was responding to recent questions and requests for documents from The Times.

PUC’s leaders “alerted the district about money transfers from PUC to the nonprofit as soon as they were uncovered,” according to a statement PUC issued Monday night.

But this explanation did not satisfy L.A. Unified.

The recently disclosed conflicts “underlie the very concerns” previously raised by the school district’s charter school division, according to the notice from L.A. Unified. “This FPPC complaint was filed three years after PUC had been placed on notice by the [charter school division] regarding related concerns,” the district’s letter said.

The district cited correspondence from 2015, including a letter to PUC seeking information about Partners for Developing Futures and Better 4 You Fundraising as well as any ties between these entities and PUC.

“For PUC to assert in the FPPC complaint that it was not aware that Dr. Rodriguez had an interest in Better 4 You Fundraising is confounding since they were on notice of a potential conflict-of-interest issue,” L.A. Unified stated.

The district applied the same logic to the recent discovery of the checks to Partners for Developing Futures.

“These issues show a pattern of disregard and ineffective adherence to conflict-of-interest laws,” said the district letter, which was signed by specialist Aida Tatiossian and fiscal services manager Sandra Melendez.

The latest notice also restates a sore spot between the district and PUC. L.A. Unified has long faulted PUC for allegedly refusing to provide documents about PUC National, which contracts with individual PUC schools to provide financial services and personnel management.

“PUC has consistently refused to provide information about PUC National indicating that PUC National is a private organization,” L.A. Unified stated.

PUC officials did not have an immediate response regarding PUC National when the district released the records late Monday. But they issued a statement defending their willingness to work with the nation’s second-largest school system.

“PUC has always responded to all of Los Angeles Unified’s requests for information and has voluntarily made substantial changes in responses to its recommendations,” the group said. “PUC strengthened its governance structure and fiscal controls after LAUSD’s notices in 2015. PUC’s leadership will continue to act with transparency and integrity.”

Similar issues have come up with other local charter networks that have created regional or national affiliates.

Charter critics have accused these networks of hiding their business operations behind affiliated corporations. To date, charter groups have successfully opposed state legislation that would open these affiliated groups to the public records act and open meeting laws.

L.A. Unified also flagged another longstanding concern about an additional alleged conflict of interest: PUC National and regional PUC boards shared some of the same members, even though the regional groups hired the national group to provide services.

PUC’s charters could be shut down if the L.A. school board finds it has failed to address serious violations. A less severe penalty would be requiring a change in leadership, although both actions are rare.

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