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St. Joseph School District Braces For Fallout In Wake Of Federal Investigation

Sam Zeff

If you wandered into the St. Joseph, Missouri School District convocation a couple of weeks ago you would probably think everything in the district is just fine.

The 2,000 faculty and staff jammed into the Civic Center downtown were loud and seemed primed for the start of the 2014-2015 school year. But everyone in the arena that morning knew the district was in serious trouble.

Since April the FBI, a federal grand jury in Kansas City and the Missouri State Auditor have all been investigating the district of 11,000 students.

The district, at the direction of the school superintendent hired one year ago, secretly doled out $270,000 to 54 administrators, from associated superintendents down to assistant building principals. Not only did Superintendent Fred Czerwonka hand out the bonuses, he did so without approval from the Board of Education.

Soon after administrators pocketed the bonuses, Czerwonka had a nickname: The Candy Man.

"Fred Czerwonka and the chocolate factory and his candy stipends. I have no idea where it came from but it certainly caught on," says Chris Danford, a St. Joseph School Board member who first learned about the stipends at a high school basketball game in January.

“I thought it was a little problem but it turns out it’s like an iceberg. It just keeps going, and going and going. And it’s discouraging,” Danford says.

It's now clear that the district has been paying out a raft of other stipends for years.

In a statement, the district said stipends from Czerwonka and others were handed out for additional work, like going to night time civic events.

But Danford's chance encounter has plunged the 16th biggest school district in Missouri into crisis. This was a district, she says, that just cut $3 million from the budget.

The FBI investigation

The federal criminal investigation into the St. Joseph schools that began in the spring has been picking up steam in the last few weeks. The grand jury has issued two subpoenas for documents.

KCUR has learned that the first subpoena demanded personnel records, contracts and financial data going back to 2000, according to a source who has copies of the subpoena.

A second grand jury subpoena for documents was received on March 10 and has narrowed the investigation. The second subpoena, according to this source, is focused on 14 district employees, all top administrators. The second subpoena also seeks additional financial information, including expense reports, and does not go as far back in time, the source says.

KCUR has also learned that three criminal defense lawyers in Kansas City who specialize in white collar crime have been retained by those caught up in the FBI probe.

Former U.S. Attorney Todd Graves has been retained by a St. Joseph business; J.R. Hobbs has been hired by the school board; and Brian Gaddy has been retained by former superintendent and former school board president Don Colgan.

'Buying loyalty'

Czerwonka took over as superintendent in July of 2013. He came from the West Plains, Mo., district in the Ozarks. Just weeks into his tenure, Czerwonka, according to district officials, got a rebate from the district’s insurance company.

Board policy dictates that that money be reported to the board and then deposited. However, according to Danford and others in the district, Czerwonka divvied up the money among administrators.

But it was his decision to not inform the board about these $5,000 stipends that lead to the current investigations and a smoldering disdain among many of the district’s teachers and patrons.

“It’s not about educating students. It’s about bloating administrative salaries,” says local NEA President Todd Brockett.

Brockett teaches middle school history and computer aided design. He’s taught in the St. Joseph School District for 23 years and, like almost everyone connected to this story, is a native who loves his hometown.

Czerwonka is a seasoned school administrator. So why would he do something that clearly violated board policy?

“I think he was buying loyalty,” says Danford, who raised the issue of the Candy Man stipends at a Board of Education meeting in March. “What’s a quick way to come into a town you know nothing, you know no one. People have been in their jobs forever. In fact, some of the people downtown applied for that job. What’s the quickest way that you can make everyone happy? Give them more money.”

Czerwonka has refused to discuss the investigations.

Attention also has now focused on other stipends the board neither approved nor even knew about. The board and public have discovered there were few things administrators did for which they didn’t receive a stipend.

They were paid thousands extra for night duty and local travel. If you were on something called the Superintendent’s Council you got an extra $9,000 a year. There was a different group called the Superintendent’s Cabinet where members received an extra $2,800 a year. Associate superintendents got an extra 15 percent of their salary. 

There was even a stipend simply labeled “additional” that added thousands of dollars a year to some administrators salaries. 

There were also stipends for teachers and other staff that the board had not approved. Extra money for cell phone reimbursement, maintenance on-call and ROTC coordinator. And none of this was known to the board until the "Candy Man stipends" were revealed.

“You have a system of bloated bureaucracy,” says Brockett. “Stipends have become a method to increase salaries.”

In addition to the stipends, many patrons are also upset over promotions and raises given to Czerwonk’s wife, the wife of Human Resources Director Doug Flower and the son of former board president Dan Colgan.

The city reacts

So how is all this playing in the city of 77,000?

“This is the topic of the town,” says local business owner John Hickman who two years ago helped spearhead a campaign to pass a bond issue to build two new elementary schools in the district.

“It’s kind of like the Twilight Zone. In what world are they living that they thought that would ever be okay?” he asks.

The potential fallout to the district is serious. 

Next year a portion of the districts’s property tax mill levy will sunset unless voters renew it. At stake is $6.5 million. Passage is now in serious trouble.

“I would vote no on the levy until further notice. I wouldn’t have been that way 12 months ago,” says John McCarthy who is a father of two teenagers in the district. “It’s a definite black eye.”

McCarthy is general manager of RitePack, a major employer in the area.

Two years ago he went door-to-door campaigning for the bond issue. Currently he volunteers on an ad hoc committee studying the district’s salary structure. Now, he says, he won’t even pull the lever so the district can keep its current mill levy.

“I would have been out there supporting the levy and telling my friends to vote for it. Now, I’m not voting for it until there’s a change in the administration and there’s a change in the board.”

Just two years after what some consider the height of the district’s popularity some of its biggest supporters are ready to abandon the St. Joseph public schools.

“I, along with fellow board members, are upset and concerned over these issues our district is experiencing,” says board president Brad Haggard. “I'd ask anyone abandoning the district to please allow these audits and investigations to unfold and as I've stated in previous interviews if an individual or individuals have done wrong, they will be held accountable for their actions.”  

But local businessman John Hickman doesn’t need to wait for audits or investigations to be completed. He wants action now.

“This community values education and is willing to support education. What they don’t value is the lack of transparency and they don’t trust the leadership of the board or the administration. And, it turns out, with good reason,” he says.

Hickman also places the blame for most of the district’s troubles not with the current superintendent but with former superintendent and former school board president Dan Colgan.

“Dan Colgan has done more to harm the children of this school district than any other human being in St. Joe,” he says.

Colgan spent his entire career in the St. Joseph School District including 14 years as superintendent. In 2010 he was elected to the Board of Education but many insiders say he has kept a hand in the district’s day-to-day operations.

Multiple sources in the district say Colgan would approve the Candy Man stipends when he was board president if, and only if, his son Mark was given a promotion and raise. Mark Colgan, who supervises the district’s warehouse, received a $15,527 salary bump several weeks ago. Dan Colgan denies he approved the Candy Man stipends in return for more money for his son.

Colgan doesn’t give a lot of interviews. But right after his term as board president ended in May he sat for a long interview with KNPN, the Fox station in St. Joseph. The station posted the entire 41-minute interview on its web site.

During the interview Colgan was both emotional and very frank, admitting that investigators will no doubt find problems.

“This school district is not perfect. And the people who run and have run this school district, board members and administrators and teachers and custodians and so on were not all perfect. And we don’t always do all the right things at the right time in the right way,” he told the station.

“And I really believe, when all this is sorted out, we’re gonna find that the St. Joseph School District is made up of human beings. People who make mistakes.  But, really, criminal, no, come on. Vicious? Absolutely not.”

Even though the troubles in the St. Joseph School District have been extensively covered by the city’s newspaper and TV stations one element is missing: is this damaging the delivery of education? 

Most agree not yet. But it will.

Consequences in the classroom

The education of students hasn’t been damaged, says first grade teacher Lacy Hochenauer. But she’s worried that the FBI and State Auditor investigations will prevent voters from renewing the current mill levy. 

“What more have they found out now? How much more crooked is it really? How much dirtier can it get?” she says with some lament in her voice.

And if the mill levy gets cut and the district is out $6.5 million students will absolutely pay a price.

“It’s going to affect what’s available for students, what’s available for teachers. It’s going to effect my kids personally with class sizes. It’s going to have a just a huge effect if that happens,” says high school history and government teacher Jeff Leake.

Leake is a more moderate in his feelings about the district. When asked if he likes superintendent Fred Czerwonka,Leake seems quite sincere when he says he does.

“You know, I like him. I like a lot of moves that he’s made,” he says. “Some of the changes he’s made are better for the district.”

Still, he’s part of a growing chorus who predicts the mill levy will fail at the ballot box and fail big.

“I think people are waiting to see either did somebody do something wrong or is everything okay,” Leake says. “I just can’t see the FBI spending this much time and resources without indicting somebody. Chances are something wrong was done somewhere.”

Reporter Sam Zeff originally reported this story for Ballotpedia.org.

You deserve to know what your taxpayer dollars are paying for and what public officials are doing on your behalf – I’ll work to report on irresponsible government spending in the Kansas City area and shed light on controversies that slow government down. And when you hear my voice in the morning, you know you’re getting everything you need to start your day. Email me at sam@kcur.org, find me on Twitter @samzeff or call me at 816-235-5004.
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