Daily Breeze, by Rob Kuznia, Rebecca Kimitch and Frank Suraci

By Rob Kuznia

The superintendent of the Centinela Valley high school district negotiated a contract so loaded with out-of-the-ordinary perks that he managed to amass more than $663,000 in total compensation last year.

Documents obtained by the Daily Breeze from the Los Angeles County Office of Education show that although Jose Fernandez had a base pay of $271,000 in the 2013 calendar year, his other benefits amounted to nearly $400,000.

On top of that, the district just over a year ago provided Fernandez with a $910,000 loan at 2 percent interest to buy a house in affluent Ladera Heights.

Though Centinela is made up of just three comprehensive high schools and a continuation school in Hawthorne and Lawndale, Fernandez’s payout in 2013 more than doubled that of his peers in larger neighboring South Bay districts.

His total compensation even eclipsed that of John Deasy, superintendent of the Los Angeles Unified School District, the nation’s second-largest school system. Deasy’s base salary is $330,000 this school year and his gross compensation is just shy of $390,000, according to the LAUSD. But the district enrolls more than 650,000 students while Centinela Valley serves about 6,600.

“That’s obscene,” said Sandra Goins, executive director of South Bay United Teachers, the umbrella union for teachers in the Centinela Valley, Redondo Beach, Manhattan Beach and Palos Verdes Peninsula school districts. “That places him above the president of the United States — the leader of the free world.”

(The overall compensation package for President Barack Obama — salary, benefits, plus other perks — amounts to $569,000 annually.)

Fernandez, 54, was hired in January 2008 to take over a district suffering from lagging student test scores as it teetered on the brink of financial ruin. He had worked in the district since 1999, serving as an assistant superintendent of business and executive director of its adult school.

A former Inglewood city councilman, he took the top job at Centinela Valley during a tumultuous time. His predecessor, Cheryl White, had just been fired, and the district was fiscally insolvent. Fernandez was viewed as a money-minded leader.

After serving nearly a year as the interim superintendent, Fernandez was promoted to permanent status in late 2008 on a narrow 3-2 vote. With the new title came a 19-month contract with a base salary of about $163,000, plus allowances.

As Fernandez moved to shake up the district and steer it back toward financial stability, school board members rewarded him with a generous contract in 2009. Though his base pay increased only slightly to $198,000, a careful read of the deal reveals some striking fringe benefits:

• An annual raise of 9 percent.

• A relatively short work year of 215 days, compared to as many as 245 days worked by superintendents of other school districts.

• The right to be paid for days worked beyond the contracted work year of 215 days.

• A clause allowing him to be reimbursed by the district for purchasing “air time,” or up to five years of service to add to the number of years he actually worked, so as to boost his lifetime pension.

• A stipulation that he can only be fired by a supermajority of the board (four of five members).

• The ability to cash out vacation pay.

• An option to take a low-interest loan from the school district to purchase a home.

Fernandez exercised the loan option a little more than a year ago, using it to buy the two-story, four-bedroom home in Ladera Heights, one of the more expensive ZIP codes in Los Angeles County. He has 40 years to pay it off, at an interest rate of just 2 percent.

“That’s a super good deal,” according to Steve Murillo, owner of First Manhattan Mortgage and Realtors in Manhattan Beach. Murillo noted that the vast majority of home loans must be paid off in 30 years; interest rates in the current market now hover in the low- to mid-4 percent range.

“It’s like they are giving him free money,” he added.

STATE SEEKING PAY TRANSPARENCY

The revelations about Fernandez’s compensation package come at a time when State Controller John Chiang is calling for more transparency among California school districts about superintendent salaries. Last week, he began asking every public school district for compensation documents, so they can be posted on his website at www.sco.ca.gov.

Chiang has been putting together a user-friendly database listing the salary and benefits of California public employees ever since the scandal in the tiny city of Bell, where city leaders hid their exorbitant pay packages from the public. City Manager Robert Rizzo was collecting a salary of nearly $800,000, part of an annual compensation package worth $1.5 million.

Rizzo, the former assistant city manager and six other Bell officials have been convicted of corruption charges. He is currently serving 10 to 12 years in prison.

“After the city of Bell demonstrated how the absence of transparency and accountability can breed fiscal mismanagement, my office endeavored to create a one-stop resource detailing compensation data for every public official and employee,” Chiang wrote in a letter sent to every public school district on Monday.

Fernandez declined to be interviewed for this story, saying, through a spokesman, that he was loath to have to defend earning what he is legally entitled to by contract.

But his supporters point out that he has brought big improvements to a district that, prior to his arrival in 2008, was on the verge of bankruptcy, not to mention a state takeover.

“We were one payroll away from being taken over,” said Bob Cox, the district’s assistant superintendent of human resources. “This really was a scary place.”

Under Fernandez’s tenure, test scores in the largely low-income district — once among the lowest in the county — have risen, especially at two struggling high schools, Hawthorne and Leuzinger. (They’ve dipped at Lawndale High.) Also, major facility upgrades are either underway or finished at all three campuses, thanks to a pair of voter-approved bonds netting nearly $100 million each.

In addition, Fernandez played a key role in the November 2012 passage of a parcel tax that will bolster the district’s general-fund revenues of about $50 million by $4.6 million for each of the next dozen years.

“He’s a great leader,” said board President Maritza Molina, a 2004 alumnus of Lawndale High who was elected to the board in 2009, just months after graduating with her bachelor’s degree from UC Santa Barbara. “He is very transparent with the board.”

The school board has been so pleased with Fernandez’s leadership that it unanimously extended his lucrative contract for another four years in 2012.

Pressed about specifics in the contract, Molina instructed a reporter to discuss details with Michael Simidjian, an attorney working for the district on a contract basis.

The Daily Breeze also called the three other board members who voted for Fernandez’s 2009 contract. Two of them — Rocio Pizano and Hugo Rojas — did not return calls. The third, Gloria Ramos, returned the call but declined to comment.

Jane Robison, a spokeswoman for the Los Angeles County District Attorney’s Office, said it isn’t illegal for a school superintendent — or any government official — to earn a high salary.

“Public officials can make high salaries if an elected board approves it in an open meeting,” she said.

Julie White, a consultant with the Association of California School Administrators, said she hasn’t come across so hefty a pay package in California. “That’s a large amount of money,” she said.

But she said it isn’t necessarily unusual for superintendent contracts to include housing assistance. That said, housing perks often raise eyebrows in the K-12 realm. In 2008, then-LAUSD Superintendent David Brewer drew fire for his $3,000-a-month housing stipend, part of a compensation package that totaled $381,000.

It isn’t entirely clear how Fernandez’s 2013 total payout breaks down. Some lucrative perks in his contract would be difficult for a layperson to spot. For example, one clause reads: “The District shall pay the employee portion of the Public Employee Retirement System (PERS) contribution and shall Compensate Superintendent for any service credit purchased.”

Though it sounds innocuous, that clause fattened his 2013 compensation by a six-figure sum that exceeds the entire annual salaries of many superintendents. About $215,000 of that came from the district’s one-time reimbursement to him for purchasing the service credit known as “air time,” said Simidjian, who works for the firm Dannis Wolliver Kelley.

Although air-time benefits vanished on Jan. 1, 2013, as a result of statewide pension reform, officials in Centinela Valley say Fernandez purchased his years out of pocket before then, and was reimbursed by the school district during the 2013 calendar year.

Another roughly $20,000 came from how the district covers Fernandez’s annual contribution to the state’s retirement system.

DAYS-OFF BENEFIT

One obscure benefit pertains to the 215-day work year, which payroll experts say is short. It is more common to work 225; Deasy’s LAUSD work year spans 249 days.

“Two hundred and 15 days means that he doesn’t have to work nine weeks,” said a retired member of the California Association of School Business Officials, who is highly regarded as an expert on legal school payroll matters but asked that his name not be used. “If you get a full annual salary, and there’s nine weeks a year that you don’t have to work, you certainly don’t need to take 30 days of vacation.”

The short work year essentially encourages Fernandez to cash in much or all of his vacation time at the end of the year. His contract gives him 30 days of vacation annually.

In 2013, Fernandez did this to the tune of about $25,000, Simidjian said.

The short work year also increases his daily rate of pay. This affects yet another arcane-but-important provision in Centinela: The right for the superintendent to be paid for days worked beyond the contracted work year. In 2013, this contract provision beefed up Fernandez’s bottom line by about $50,000, Simidjian said.

Even if some of these expenses are one-time payments, Fernandez’s gross compensation has risen year after year since 2010, when it was $286,290. That amount ballooned to $392,000 in 2011, then to $403,000 in 2012 and $663,000 last year, according to county Office of Education, which calculates pay and compensation in calendar rather than fiscal years. In 2014, Fernandez’s total compensation is expected to return to the $400,000s.

Meanwhile, teachers in the Centinela Valley Union High School District, which serves communities where the median household income ranges from $33,000 to $49,000, have received two raises since 2006-07 — one for 1.75 percent in 2011, and the second for 1 percent at the beginning of this school year.

Jack Foreman, the Centinela Valley teachers union president, said the pay range for teachers in the district hovers around the county average, but the benefits package is among the least generous in the county.

“It really makes me feel sick,” he said of Fernandez’s compensation. “I think the message is that the district doesn’t put a very high value on its teachers.”

In an effort to make a fair comparison, the Daily Breeze obtained the same W-2 documents from the county for the superintendents of the Torrance, Redondo Beach and Palos Verdes Peninsula unified school districts. Total 2013 compensation amounted to $257,804 for George Mannon of Torrance Unified, $251,032 for Steven Keller of Redondo Beach Unified and $227,229 for Walker Williams of Palos Verdes Peninsula Unified.

As for Fernandez’s compensation package, the retired school finance expert, who helped the Daily Breeze deconstruct the contract, said he has never come across a deal like this during his 29 years in the business.

“I’m just appalled — it’s horrible,” he said. “It’s such a rip-off. There are some similarities to Bell, you might say. And the problem is, since most of it is legal, who can do anything about it?”

By Rob Kuznia

For a couple of moms from working-class families hoping to retain their seats on the Centinela Valley school board, it was a stark lesson in machine politics.

In a small room at the Proud Bird restaurant near LAX, a group of maybe 15 had gathered to support board members Sandra Suarez and Gloria Ramos. Nearly everyone sharing finger foods that day was connected to a community development corporation called TELACU, which bills itself as the fifth largest Latino-owned business in California.

There were architects, lawyers, consultants. And high-powered figures from TELACU itself. Everyone in attendance wrote out two checks for $99 — the highest amount that can go unreported in campaign filings — one for Suarez, one for Ramos.

Donors included President and CEO David Lizarraga, who at the time was chairman of the U.S. Hispanic Chamber of Commerce and has since been appointed by President Barack Obama to a key administrative post in the U.S. Department of the Treasury. Also included was John Clem, the TELACU executive who heads up all the construction projects in the Centinela district, as well as the wives of both men.

All for two women in a tiny district that oversees just three comprehensive high schools in Lawndale and Hawthorne.

“It was kind of odd,” Suarez said. “They were giving us money — I’m not used to any of that. … To tell you the truth, I didn’t even realize they were giving for us at first.”

The event was a window into the political machine that has been picking leaders in the tiny district since 2008. In the two past contested elections, TELACU has poured large amounts of money into campaigns to elect their favored candidates who almost always win.

TELACU won, too. Since 2008, the TELACU-backed Centinela Valley school board has put two construction bond measures on the ballot totaling nearly $200 million. Voters approved both, and TELACU was awarded contracts to manage the construction projects.

Clem, president of TELACU Construction Management, did not return calls from the Daily Breeze on Tuesday and Wednesday. But Centinela Valley officials have pointed out that as a result of the two successful bond measures — one in 2008, another in 2010 — major face-lifts have occurred or are in the pipeline for all three campuses. The projects have replaced old, sometimes crumbling facilities with state-of-the-art classroom wings, media centers, offices and commons areas.

Critics, on the other hand, say the whole thing smacks of a money grab for the interested parties at the expense of the taxpayers.

“The problem with Centinela Valley, and so many school districts and community colleges, is that they have become bond-passing machines that milk the public to pay for lavish construction projects, outrageous salaries and terrible loans,” said Mariano Vasquez, the plaintiff in a lawsuit opposing a recently passed parcel tax floated by Centinela Valley and four feeder elementary school districts.

“This causes a very harmful misallocation of scarce resources and capital that slowly brings ruin to the town.”

In recent weeks, Superintendent Jose Fernandez — who took the helm roughly at the same time that TELACU began exerting its influence in Centinela — has said publicly that the district intends to try for a third construction bond. This announcement came just days before a Feb. 9 story in the Daily Breeze revealed that Fernandez amassed more than $663,000 in total compensation last year. At least $215,000 of that came from a one-time expense, but Fernandez — in exercising another generous provision of his contract — also has taken a $910,000 loan from the school district to purchase a home in Ladera Heights. He has 40 years to pay it off, at 2 percent interest — an unusually favorable set of terms.

UNUSUAL DONATIONS

TELACU first demonstrated its ability to influence the outcomes of Centinela Valley school board elections in 2009. The company donated $28,000 to a political action committee called Citizens for Better Schools, according to campaign finance reports obtained from the Los Angeles County Register-Recorder’s Office. Citizens For Better Schools, in turn, dished out $55,000 to purchase mailers and other promotional materials touting three candidates: Rocio Pizano, Hugo Rojas and Maritza Molina.

(By comparison, Pizano’s election committee raised $5,000, according to the documents. Rojas and Molina apparently raised no money.)

Pizano was an incumbent. But Rojas, a karate instructor and former Hawthorne school board member with at least two DUIs on his record — and Molina — then a 23-year-old recent college graduate — ousted two incumbents with education credentials. One of them, Rudy Salas, is the principal at Hawthorne Middle School. The other, Frank Talavera, is an educator who at the time was teaching at Gardena High School. Both opposed an effort to put a bond measure on the ballot in 2008.

Sources say those two board members were controversial as well and had a vindictive streak. Salas declined to be interviewed; Talavera couldn’t be reached.

In his ballot statement that year, Talavera wrote that his experience “will help me guide the district in a more positive direction where students are the PRIORITY and not buildings or superficial fix-ups.”

TELACU’s preferred candidates were triumphant. In December 2009 — a month after the election — the new school board unanimously approved Fernandez’s generous employment contract. Not long after, the board voted to put another $98 million bond measure on the ballot. In November 2010, the voting public gave its assent.

The initiative raised eyebrows on the Lawndale City Council.

“I think it’s outrageous they do this in low-income communities,” Councilman Larry Rudolph said. “What are we getting for it? I don’t see anything except for these big fancy buildings. I don’t see how they are going to make the kids any smarter.”

Rudolph added that in his own elections, he does not accept campaign contributions. “I wouldn’t want to be in debt to anybody,” he said. “I don’t have to do anything but vote my conscience.”

Although it is common for big construction companies to make financial contributions for the passage of bond measures, it is rare for them to put up money for individual school board candidates — at least in the South Bay.

“In our case, I doubt anybody got a dime,” said Jane Diehl, a former longtime school board member in the Redondo Beach Unified School District. Diehl was on the board when voters in the district approved a $145 million construction bond measure in 2008. That project has been managed by the company Balfour Beatty.

“Most of the school board elections in Redondo are pretty sparse,” she added, saying candidates there generally raise around $8,000. “If you want to win, you gotta walk” and knock on doors.

Mark Steffen, president of the Torrance school board, said he believes the same is true in Torrance Unified, where voters approved a $355 million pair of bond measures in 2008.

Balfour Beatty manages those projects as well.

“They’ve never offered, nor have I sought out dollars from them,” Steffen said.

In the Centinela Valley school district — which oversees Lawndale, Leuzinger and Hawthorne high schools — TELACU hasn’t been the only heavy contributor to election campaigns.

In 2011, the investment firm Piper Jaffray of Minneapolis contributed $25,000 to Citizens for Better Schools, donating much of that to TELACU’s favored candidates. The two firms have combined forces elsewhere in support of school bond measures, including a 2010 bid in Claremont. Piper Jaffray contributed $25,000 to that campaign, and TELACU $20,000.

Also contributing to Centinela’s 2010 effort to get a construction bond measure passed were law firms such as Dannis, Woliver, Kelley — which has a lucrative contract with the school district. (It donated $7,500.) Another law firm gave $5,000.

CHANGING SUPPORT


The event at the Proud Bird back in the summer of 2010 was a campaign fundraiser for the 2011 school board race. It was early in the game, and things wound up taking an unexpected twist — both Suarez and Ramos fell out of favor.

It so happens that Suarez is big on historic preservation. When it came to her attention that the bond measure called for knocking down much of Leuzinger High, she began to have doubts. By October 2010 — a few months after the fundraiser — she was fully opposed, and speaking out publicly.

It’s less clear why the construction company ended its support of Ramos. But she — unlike the other three members — was generally known for occasionally voicing dissent on district matters.

In any event, Citizens for Better Schools found two new candidates to support: banking executive Lorena Gonzalez, who was challenging Suarez; and Ugo Felizzola II, a 24-year-old financial analyst who was trying to unseat Ramos.

This time, the political action committee spent $82,000 on its campaign favoring those candidates. Once again, TELACU made a sizable donation; records show it contributed at least $10,000. (This was the race in which Piper Jaffray pitched in $25,000.)

Because none of that money went to the candidates directly, they did not have to report the support. The committee spent at least $26,486 on each candidate. The money paid for slate mailers, door hangers, brochures and campaign signs, among other things, according to documents.

A political consultant closely aligned with TELACU met with leaders of the teachers union to request that they endorse the two political newcomers. The union declined, opting instead to endorse nobody.

The effort to oust Suarez was a success; Ramos managed to eke out a victory over the young Felizzola.

Suarez says that prior to the election, Fernandez sometimes took her and other board members to fancy restaurants such as Houston’s in Manhattan Beach. The tab, she said, was often picked up by a law firm or by TELACU.

She later took her husband to Houston’s, not knowing the prices.

“When we looked at the menu, we realized what they were, and we looked at each other,” she said.

They ordered an appetizer, ate it quickly and left.

The Ladera Heights home owned by Jose Fernandez was purchased with a loan of $910,000 from the school district at 2 percent interest. (Brad Graverson - Staff Photographer)

Superintendent Jose Fernandez was going through his second bankruptcy and had lost his family home when the Centinela Valley Union High School District threw him a golden lifeline in 2012 — a $910,000 home loan with no down payment to be repaid at 2 percent interest over 40 years.

The loan terms are exceptional to anyone with excellent credit. They are unheard of for someone who has just gone through bankruptcy, mortgage experts say. And they will save Fernandez at least $100,000.

“That is like a dream come true for anyone trying to get a mortgage. Nobody gets a mortgage like that, even with perfect credit,” said Brad Levin, president of Legacy Wealth Partners in Woodland Hills. “For someone in bankruptcy, it is an impossible situation.”

While ideal for Fernandez, the loan came at one of the worst times for the tiny district centered in Hawthorne and Lawndale, according to Sandra Goins, executive director of South Bay United Teachers, the umbrella union for teachers in the Centinela Valley Union High School District, Redondo Beach, Manhattan Beach and Palos Verdes Peninsula school districts.

“At the same time they were giving this loan, they were laying off teachers, closing down programs at the adult school. ... $1 million to the district is a lot. That is 25 percent of the entire books and supplies budget this year,” Goins said.

“Besides that, the school district shouldn’t be in the business of holding mortgages. It is not a corporation. The main focus is educating students, not lending money.”

But Fernandez, in his first comments to the Los Angeles News Group since his lucrative compensation package was revealed in a Feb. 9 article, contended the loan is nothing extraordinary.

“This is something that exists in the world of senior managers,” he said.

The loan is one of many generous provisions in Fernandez’s contract, which has come under fire after it was revealed he amassed more than $660,000 in compensation in the 2013 calendar year.

Fernandez wouldn’t comment on the compensation controversy, except to say his contract, including the loan provision, is modeled after a template provided by the Association of California School Administrators.

“I have seen many places where they have done that,” he said.

But experts say lending a current superintendent money to buy a home is unusual.

“When you have someone coming from out of state and who can’t afford the high prices of California, you might lend them money to buy a house to attract them,” said government watchdog Bob Stern, former president of the Center for Governmental Studies. “But it is definitely unusual when you have an existing superintendent and you give him a loan.”

Wendell Chun, executive director of the superintendent search firm Education Leadership Service, said of the 50 searches he has been involved in, he has never seen a superintendent offered a home loan.

“It happens, sometimes, but mostly in larger districts in very expensive neighborhoods,” he said.

Centinela Valley Union High has just 6,600 students in three comprehensive high schools. And its median home values are below that of Los Angeles County as a whole.

BANKRUPTCY BURDEN

Most people in Fernandez’s circumstances would not be able to secure any kind of home loan.

He and his wife filed Chapter 7 bankruptcy in June 2010. Fernandez also filed Chapter 7 bankruptcy in 1994. According to the 2010 filing, the couple had accumulated $3 million in debt — more than twice the value of their assets.

Much of the debt came from a family business owned by Fernandez and his wife, Miller Distributing Group, a wholesale supplier for bakeries and food manufacturers.

Fernandez said he was a casualty of the recession and a bad business decision.

“Like many Americans, my family went through a real tough time after the economic crisis,” he said. “We had close to $15 million a year in sales, but when the economy collapsed, the credit lines from our suppliers dried up and a lot of our customers went under.”

“One of the greatest mistakes I’ve made in my life was to personally guarantee the obligations of the business,” he continued. “Declaring bankruptcy was a calculated business decision to protect the family from this mountain of debt the business had acquired.”

The family also was living beyond its means — spending $17,000 a month while Fernandez’s job as superintendent brought in $13,000 monthly, after taxes and other withholdings, according to the bankruptcy filing. And they had $17,000 in credit card debt.

The bankruptcy largely relieved them of $1.5 million in corporate debt, as well as other debt. But the family gave up its home in the process.

Two months before the bankruptcy process was even complete, in December 2012, the district lent Fernandez and his wife $910,000 and they purchased a new home 1½ miles from their previous one in Ladera Heights, according to property tax records and loan documents provided by the district.

The Fernandez family never would have been able to gain financing so soon after bankruptcy otherwise, according to Steve Murillo, owner of First Manhattan Mortgage and Realtors in Manhattan Beach.

“That would kill a conventional loan,” he said.

The district, Goins contends, should have had the same concerns as a bank.

“A 40-year loan for someone who has already been bankrupt twice — anyone who would lend money like that should be concerned about whether they can recoup their money,” she said.

Under his loan with the district Fernandez’s monthly payment would be $2,756 for 40 years. Those terms save him more than $100,000 over the life of the loan compared to what he would have paid under a conventional loan, even if he had excellent credit. (With great credit, a 2012 borrower might have paid 20 percent down and 3.5 to 4 percent interest over 30 years.)

“How is it possible for CVUHSD to receive taxpayer money intended for the education of children and then use some of it to make a loan to an employee for 40 years at 2 percent interest? How is that an education activity or function?” asked Bruce Zentil, former Director of the Division of School Financial Services with the Los Angeles County Office of Education.

“There is also the board of education to consider,” he continued. “These are elected officials. They have fiduciary responsibilities. This loan was made in December 2012. At that time Jose Fernandez was in involved in his second bankruptcy. ... Does that pass muster as proper fiduciary oversight by elected officials over taxpayer dollars?”

Fernandez said his family was “very conscientious” about the loan.

“We did not abuse anything,” he said. “We could have gotten a home in Laguna Beach or Brentwood. We picked a place very close to the district, composed of people similar to people we serve in the district.”

Ladera Heights, however, boasts a median household income of $103,000, while the communities making up the Centinela Valley Union High School District range from $33,000 to $49,000 in median household income.

Goins said Fernandez’s experience is nothing like what the residents of Lennox, Hawthorne and Lawndale endure.

“I think it is obscene,” she said. “This is a working-class community and most people in this community couldn’t obtain a loan like that. … Fernandez should be able to find financing for himself. Like every other American who has declared bankruptcy — you deal with it,” she said.

BETTER RETURNS POSSIBLE

Fernandez said the district settled on 2 percent interest because that is the rate of return it would have received from the county treasury.

But Levin compared investing in a high-risk mortgage, like that of Fernandez, to investing in a sub-prime mortgage-backed security, which would bring a yield of around 6 percent — resulting in $1 million more for the district.

“I’m not saying it is a suitable risk for the district, but in terms of the risk you are taking on, it is comparable,” he said.

Goins said the district should have used the money for student needs at a time when it was struggling financially.

The same year it gave Fernandez the loan, the school board laid off 46 teachers and cut its adult education program. It also cut spending on books and supplies to $1.5 million — nearly $700,000 less than the previous year and less than half what it is most years.

The funds could have provided valuable bridge money to help the district stay above water while waiting for relief from Proposition 30, the tax hike initiative approved by California voters in 2012 that helped shore up education funding.

“Why would a school district that has concerns about finances hand out a $1 million loan?” Goins asked. “It just doesn’t make sense.”

By Rob Kuznia

The tiny Centinela Valley Union High School District employs one of the most expensive superintendents in the state of California, if not the nation.

And the district is spending nearly $200 million to provide state-of-the-art facilities at the three high schools it serves: Lawndale, Leuzinger and Hawthorne.

But the district’s test scores — while on the rise — remain the lowest among all 80 school districts in Los Angeles County. Its dropout rate — while improving — now sits at 24 percent according to the latest available figures from the state. This means about one out of every four students who starts ninth grade in the district stops attending school before graduating. The countywide average dropout rate for high schools is 15 percent. At the Los Angeles Unified School District, it’s 20 percent.

Still, the story of Centinela Valley’s academic progress is multifaceted. In summary, the district, under the leadership of Jose Fernandez — whose total compensation ballooned from $286,000 in 2010 to $663,000 last year — has made some academic strides, though not enough to lift the district out of the basement on many measures.

Fernandez, who took the helm in 2008, did not respond to a request for comment. But under his watch, the district has made gains on test scores, graduation rates, college readiness, attendance, the performance of English learners and the number of students taking Advanced Placement courses, among other things.

It also has launched several academies — schools within schools — designed to spark student interest in careers such as engineering, marine science, criminal justice, environment and culinary arts. Last year, it was recognized by the state for linking coursework to career pathways.

Hawthorne High recently became the only high school in the South Bay or Harbor Area to offer a curriculum called International Baccalaureate, an accelerated program that rivals Advanced Placement and whose most successful graduates can enter college as sophomores.

Although controversial, the new facilities bankrolled by two voter-approved bond measures have been a boon to a population of students whose level of poverty can be staggering. Teachers union President Jack Foreman says students at Hawthorne High use the brand-new media center as a place to study until 8 p.m., in many cases because it beats trying to do homework in cramped apartments.

“Half of these kids are living in very unstable homes — crazy living situations,” he said. “There were two brothers last year who told me, ‘We’re back living behind the tattoo parlor.’ ”

The Lennox apartment of a family he visited was even more discouraging, Foreman said.

“It was worse than things I’ve seen in Third World countries,” he said. “You walk in and there’s some little tiny kitchen like in the hallway. ... No central room to sit, it was dark. Oh, God — just run down. A lot of our kids are coming from places like this.”

TEST SCORE STRUGGLES

Although the district’s test scores have risen in five years, they remain a sore subject. The district’s 2013 Academic Performance Index score — a number from 200 to 1,000 assigned to schools every fall based on the performance of students on a handful of springtime tests — rose from 626 when Fernandez first arrived to 680 last year.

And yet, the 680 figure is not only the lowest districtwide score in Los Angeles County, it’s 19 points below the next lowest-scoring district, Compton Unified. In fact, Centinela Valley’s API score has been the lowest of all 80 districts since at least 2009, with the exception of 2012, when it crept up to 78th before dropping back to last, according to the California Department of Education.

(The county technically serves 81 districts, but the lowest performing of them — the Los Angeles County Office of Education — isn’t considered a regular school district as it caters to high-risk students: juvenile offenders, pupils with disabilities and potential dropouts.)

In fairness, educators say high school districts are at an inherent disadvantage when it comes to API scores because elementary students generally perform better on tests than older students.

“I would strongly argue that the L.A. County ranking is way too simplistic and definitely does not provide a fair and accurate picture of CV’s academic situation,” said John Schwada, a public relations consultant hired in late February by the district, about three weeks after the Daily Breeze published the initial story about Fernandez’s compensation. “The L.A. County ranking compares apples and oranges.”

Even so, there are five high school districts in Los Angeles County, and Centinela Valley currently ranks last among them. And of the 67 high school districts across California with a 2013 API score, Centinela Valley ranks 65th, ahead of King City and Upper Lake. (A handful of high school districts had no score.)

Schwada also noted that Lawndale High School’s scores fall in the top 50 percent when held against individual schools across the state with similar demographics. Hawthorne High falls in the top 40 percent among like high schools; Leuzinger, the bottom 40 percent.

He also pointed out that, although the district’s dropout rate as a whole is higher than LAUSD’s, the corresponding figure for individual schools paints a more favorable picture. Lawndale High’s dropout rate of 5.6 percent is better than nearly 60 percent of all high schools in Los Angeles County. He also noted that Hawthorne High’s rate of 18.6 percent is better than 21 percent of the county’s high schools, including Gardena High.

In any event, Allan Mucerino, who in the fall of 2012 became the district’s assistant superintendent of educational services, said the district’s overall API ranking among school districts in Los Angeles County is all the more reason to redouble efforts to improve further.

“I don’t want to make excuses,” he said. “I think that’s just a message that we need to continue to improve and do better. It’s why I’ve chosen to work here, because there is a lot of room for growth and work to be done, and, as a result of that, the rewards are that much greater.”

BIG CHANGES

Foreman is adamant that schools in Centinela Valley have improved significantly over the past four years.

“Leuzinger (High) is a transformed school,” he said. “I mean, that place was a hell-hole before.”

The most easily recognizable change at that school at 4118 Rosecrans Ave., in Lawndale, is the campus itself. Bankrolled by funds from a pair of voter-approved construction bonds worth a combined $196 million, the district replaced half of Leuzinger’s 80-year-old campus with a state-of-the art wing of classrooms.

Educators say discipline problems there are way down as well. And Leuzinger is no longer at the bottom of the heap on test scores.

Some, however, attribute the school’s aberrant API score spike of 56 points in a single year in 2011-12 to a corresponding sudden near quadrupling of the student population at the nearby Lloyde Continuation School, reportedly to ensure that the tests of poor-performing students would not take be reflected in Leuzinger’s scores.

“A lot of the API score comes from the 10th grade CAHSEE score,” said a district employee who asked not to be named for fear of reprisal, referring to the California High School Exit Exam. “There was a big sweep of 10th-graders sent to Lloyde. Those kids should not have been sent.”

Mucerino — who was not in Centinela Valley at the time — says while he has heard the same accusation, he believes the number of students short on credits was just unusually large that year. However, the following year, enrollment at the continuation school dropped closer to normal, and Leuzinger’s test scores plunged by 25 points.

Despite Centinela Valley’s academic struggles, plenty of the district’s students do go on to thrive after high school.

Genesis Gutierrez, the 2013 valedictorian at Lawndale High School, earned a full-ride scholarship to Cal State Long Beach, where she is already on pace to graduate early. Four of the other top students all went to either Brown University, UC Santa Barbara or UCLA.

“I loved the teachers, they were amazing,” she said. But she added: “It was just very sad that at Lawndale High School, sometimes we would have textbooks that were outdated, mismatched, tearing, ripping, etcetera.”

She lamented that students had to procure their own novels for English class, and the science labs — due to the massive construction under way — were held in bungalow classrooms.

“We had to share goggles and lab aprons,” she said. “It’s not the teachers’ fault by any means, it’s just that there wasn’t the funding.”

By Rebecca Kimitch and Rob Kuznia

In 2011, then Centinela Valley school board member Sandra Suarez made what she thought was a simple request: How much was the school district spending on legal fees with its top law firm, and what duties was the firm performing?

What she got in response heightened her suspicions that the district was spending too much on attorneys, with too little explanation to the board.

The firm, Dannis Woliver Kelley, gave her 125 pages of invoices that were almost entirely redacted — blacked out to prevent the elected school board member from seeing what exactly the district was being billed for, leaving only the dollar amounts.

On top of the stack was a cover letter explaining that fulfilling Suarez’s request, including the redactions, took “approximately 1.8 hours” of work. At $260 an hour — plus additional time for paralegal work — the request cost the district $744.

Even though she was a member of the Board of Education, Suarez was unable to get to the bottom of the matter. But it turns out the district is a golden goose client for law firms.

The district has been charged for tens of thousands of such billable hours over the past three years, amounting to an average of $1.7 million a year in legal fees, according to documents acquired by this news organization. And even with efforts to reduce legal spending, this year, Centinela Valley, which serves about 6,600 students, is on track to spend $1.2 million.

That amounts to about 10 times the legal spending of Redondo Beach Unified in the same period. Centinela Valley spent more in a single month on legal fees than Redondo Beach Unified, which is about a third larger than Centinela, did during an entire year. And both districts have recently passed bond measures for school construction and technology, which leads to additional legal costs.

Centinela’s legal fees even eclipse those of Palos Verdes Peninsula Unified and Manhattan Beach Unified — two of California’s most affluent school districts, whose parents have the financial means to litigate, and do so. The totals at Centinela Valley — which serves a high-poverty population — double what was spent during that time period in Palos Verdes Peninsula, which is twice the size of Centinela Valley, and nearly quadruple what was spent by Manhattan Beach, which is similar in size as Centinela.

Exorbitant legal fees are just the latest example of how the district is an outlier among local school districts. Centinela’s superintendent, Jose Fernandez, amassed $663,000 in compensation last year — dwarfing the amount earned by other superintendents in the area, including Los Angeles Unified School District Superintendent John Deasy, whose total compensation came to $390,000. Meanwhile, the district’s test scores ranked 80th among the 80 school districts in Los Angeles County in 2013 — and 65th out of the 67 high school districts in California. What’s more, Centinela spends 2 1/2 times the state average on its administration as a whole.

Ron Hacker, Centinela Valley assistant superintendent of business services, said a few long legal battles are largely to blame for the district’s high legal fees, particularly in 2011-12, when they reached nearly $2.5 million.

Indeed, the district has found itself embroiled in at least 25 lawsuits since 2008, and has been the defendant in 16 of them.

“We inherited a number of situations that had to get resolved … now you see a downward trend, that is because those protracted legal battles are winding down,” he said.

Last school year, about 40 percent of the district’s legal spending went to litigation. That is down to about 17 percent this year, Hacker said.

But officials with the teachers union complain that the district is excessively litigious with teachers and the union, ignoring other avenues of conflict resolution. They say legal spending on individual cases occasionally exceeds what they would hope to recoup in litigation, citing as examples a case the district filed against teachers over $18,000 and another case the district filed against the union over $100,000 that has dragged on for nearly three years.

“It’s like going to Las Vegas and putting $500 or $600 in trying to win a $200 jackpot — it doesn’t make any sense,” Centinela Valley teachers union President Jack Foreman said. “It’s really just to give business to the law firm.”

Critics of the district also say lawyers are used to threaten staff, to respond to minor grievances filed by the union and to pull readily accessible documents in response to requests for public information, like Suarez’s.

“I think they use their attorneys to protect the superintendent — to protect the things that he does not want scrutiny on,” said Sandra Goins, who is executive director of South Bay United Teachers, the umbrella union for teachers for Centinela Valley and three other area school districts. “He looks for ways to achieve his goals that he can claim are legal, so he uses his law firm. And I refer to it as his law firm because they seem to work specifically for him.”

SUPERINTENDENT’S CONTRACT

Goins points to Fernandez’s lucrative employment contract as an example of his use of attorneys. The contract — which led to a compensation package that totaled $663,000 last year and enabled Fernandez to take a low-interest $910,000 loan from the school district to purchase a home in Ladera Heights for the same amount — was drafted with the help of attorneys.

School board members now say the attorneys never explained the contract’s provision to the board.

“We would not knowingly give that high a salary,” board member Hugo Rojas said at a board meeting last month.

Reached on his cellphone, Fernandez declined to comment, noting that Hacker was acting as the district’s spokesman on this matter. When asked to respond to specific questions, the five board members also either refused to comment or did not return messages.

It isn’t entirely clear, which law firm helped Fernandez draft the contract. When asked this question, longtime board member Gloria Ramos and former board member Rudy Salas both said it was Luna & Glushon. But Dennis Luna, a partner in the firm, denied the claim.

“We did not prepare the Superintendent’s contract,” he wrote in an email. “We are constrained by the attorney-client relationship from providing further comment.”

In any event, former school board member Frank Talavera said he was asked in late 2008 to approve a one-year contract for Fernandez that was very similar to the longer-term contract approved by the board a year later. Talavera said Fernandez and attorneys maintained that the contract language was boilerplate and standard practice. “Jose would say, ‘These are common issues of job security,’ ” Talavera said. “He would throw out the word ‘ACSA’ (referring to the Association of California School Administrators), and the lawyers would agree, ‘Yeah, yeah, these are commonplace occurrences.’ ”

Talavera lost his seat in 2009, as did Salas. Both were consistent voices of dissent on the board at the time.

In that year’s school board campaign, the firm Luna & Glushon contributed $5,000 to Citizens for Better Schools, which in turn used the money to purchase mailers for school board candidates Maritza Molina, Rocio Pizano and Rojas. Those three candidates were elected that November. The very next month, those board members — two of whom were brand new — voted to approve Fernandez’s lucrative contract.

OTHER LEGAL EXPENSES

This school year, Centinela Valley’s bond measures are responsible for the largest portion of its legal fees — 24 percent, Hacker said. The school district has successfully floated two voter-approved construction bond measures since 2008, each worth $98 million.

When a district issues bonds, it is required by law to disclose a significant amount of financial background to potential investors. Those requirements, and others, take a lot of legal work, Hacker said.

But Redondo Beach Unified, too, has successfully leveraged about $200 million since 2008 in voter-approved bond measures, whose yields have been used for massive construction projects and technology upgrades. Manhattan Beach Unified also passed a construction bond measure in 2008, for $67 million. And those districts have nowhere near the legal spending of Centinela Valley.

In Centinela, another 17 percent of this year’s spending has gone to “general legal” — a category that Hacker says is hard to define but basically includes all legal costs associated with issues that are not ongoing, one-time matters that are quickly resolved.

Next, 11 percent of spending is on personnel matters — everything from discipline to training; 9 percent goes to issues related to the district’s development of new charter schools; 7 percent to leases and property issues; 6 percent to construction and facilities matters; and the remaining 9 percent to a miscellaneous legal costs.

Hacker said Centinela Valley is taking steps to reduce spending in all categories, and some — such as spending on charter schools and bonds — will be reduced dramatically.

“We are aware it is a large amount of money,” he said. “At the same time, if we are put in the position where we need to use counsel to protect ourselves, we are not going to hesitate to do that. There is an old expression — an ounce of prevention is worth a pound of cure.”

Attorney Janet Mueller, of Dannis Woliver Kelley, which represents 200 school districts across the state, said some districts are more risk-averse than others.

“Sometimes you look at legal services as an investment — managing risk in a certain way. Sometimes you are willing to take a risk and deal with the consequences,” she said. “There are a lot of different styles and approaches, and there is room for changing your approach.”

But union critics say the district can do much more to reduce its legal spending. As an example, they point to the fact that attorneys are often sitting in the audience of board meetings to answer legal questions.

DWK attorney Candace Bandoian said such a practice is “not unusual.”

“We like to speak to the board directly, we consider them our client,” she said.

But officials from other South Bay districts disagree.

Carolyn Seaton, executive director of educational services in the Manhattan Beach Unified School District, said she can’t remember seeing district-hired attorneys present at a single open-session meeting in that district since at least 2005.

“It’s happened a couple of times in closed session, but it’s still very rare,” she said. “The board might need some legal advice on perhaps a personnel issue or a negotiating issue.”

Tammy Khan, spokeswoman for the Torrance Unified School District, said an attorney has attended just three board meetings since 2009 to discuss matters related to construction bonds. Aside from that, she said, attorneys never attend board meetings, “not even closed session.”

Attorneys also seldom attend the school board meetings held by the K-8 Hawthorne School District, whose students feed into Centinela.

“The only time I have an attorney present at our board meetings is when we have our annual Brown Act update,” said Helen Morgan, superintendent of the Hawthorne School District.

Centinela Valley also apparently used its lawyers to go after Suarez — the former school board member who became a maverick or a rogue, depending on whom you ask.

By 2011, Suarez had become the lone voice of consistent dissent on the five-member board — and a chief enemy of Fernandez’s.

Suarez is the founder of the Leuzinger High’s alumni association. In a letter dated Nov. 2, 2011 — less than a week before the election in which Suarez was unseated — an attorney from Dannis Woliver Kelley sent Suarez a cease-and-desist letter accusing her of appropriating Leuzinger’s Olympic ring logo for the alumni association’s website.

It turns out the website referenced by the attorney was created not by the alumni association but the graduating class of 1981, which was preparing for its 30th reunion.

Lawyers also got involved in a petty dispute between Suarez and Fernandez over whether Suarez should continue to have a mailbox at Leuzinger High, which housed a memorabilia room run by the alumni group. In fact, the dispute was the impetus for her visit to the district office in Lawndale asking to see legal invoices.

Less than a week later, at the next school board meeting on Feb. 22, 2011, the school board voted 2-1, with Gloria Ramos abstaining and Suarez voting no, to issue Suarez a formal reprimand, saying she had overstepped her authority in several respects.

Among the examples cited in a letter signed by then-board President Rojas was her request to view legal invoices, a move he characterized as “disruptive.”

By Rob Kuznia

The embattled superintendent of the Centinela Valley school district — who is under investigation for his massive pay — took out a $750,000 life insurance policy before securing approval from the school board to do so, the Daily Breeze has learned.

That life insurance policy was in addition to a $1 million policy that Jose Fernandez had already taken out. Both were whole-life plans, meaning the premiums paid by the district can be cashed out, like the balance of a bank account.

For 54-year-old Fernandez, whose total compensation of more than $663,000 in 2013 made him one of the highest-paid public school superintendents in the nation, those policies grant him access to even more income, should he choose to surrender the policies and take the cash.

Fernandez today could surrender the larger policy for $154,770 in cash, and the smaller policy for about $83,000, said Rob Damico, an insurance expert who came to this conclusion based on charts in the policies that were obtained by the Daily Breeze.

After giving the school district the 20 percent share of any payout to which it is entitled by contract, Fernandez could cash out both policies and take home about $190,000.

“That’s a nice little bonus he’s getting,” said Damico, a State Farm insurance agent in Signal Hill. “I wish I had been the one that sold this policy. The commission would have been really nice on this thing.”

School experts say it is rare for school administrators to get whole-life insurance policies from their employers. Most public school administrators — and most employees in general — have term-life policies that offer a payout to a beneficiary only in the event of death.

Whole-life policies, on the other hand, double as savings accounts, yielding modest annual returns to the tune of about 2 to 3 percent, Damico said.

Naj Alikhan, communications director for the Association of California School Administrators, said most professionals inside and outside of education have a compensation package that includes some sort of life insurance policy.

“Those policies could come in various forms, from term-life to accidental death and dismemberment to any other configuration,” he said in an email to the Daily Breeze. “Whole life policies are rare in all lines of work.”

But Ken Shelton, the former chief business officer of the Los Angeles County Office of Education, said it isn’t unheard of for administrators to get whole-life policies.

“It happens, but I don’t know the frequency,” he said. “It’s not totally unreasonable.”

In any case, whole-life policies are expensive. The Centinela Valley school district, which oversees three comprehensive high schools in Hawthorne and Lawndale, has been paying New York Life about $56,000 a year in premiums for the $1 million policy, and about $41,000 a year for the $750,000 policy. That adds up to about $97,000 a year, all for premiums.

The $1 million policy was among the many perks enshrined in Fernandez’s employment contract, approved by the school board in December 2009. Documents show Fernandez initiated the policy the next month, securing a plan from New York Life.

Nearly a year later, on Oct. 28, 2010, Fernandez took out a second policy from New York Life, according to documents obtained by the Daily Breeze. The date of issue on that $750,000 policy was Nov. 8, 2010.

However, it wasn’t until the following month, on Dec. 14 of that year, that the Centinela Valley school board approved the second whole-life policy for Fernandez among a batch of revised board polices and administrative regulations. The milieu also included $300,000 whole-life policies for Assistant Superintendents Bob Cox and Ron Hacker, as well as $150,000 term-life policies for all managerial employees, including the school board.

The school board vote wasn’t unanimous.

Voting against it was one board member, Sandra Suarez, who by then had become a lone-wolf dissenter on a board whose core three members were in lock step. (Gloria Ramos abstained on that item.)

Suarez said she wasn’t even aware of the life insurance issue at the time. Instead, she objected to a pattern she was noticing: district officials, she said, would make decisions first, and then seek board approval later. District officials often would try to rectify such matters by making the votes retroactive to an earlier date. Fernandez’s whole-life insurance policy, for example, was made retroactive to the beginning of the school year.

“Certain things he might have wanted done, they did ahead of time,” she said. “It tells us something: The board was not making the decisions; he was making the decisions.”

Reached on his cellphone Thursday, Fernandez declined to comment. The Daily Breeze also emailed detailed questions to Fernandez’s attorney, Spencer Covert. Aside from a follow-up question sent by Covert’s secretary, the office had not responded by Thursday evening.

Fernandez’s compensation package is currently being reviewed by several agencies, including the FBI, the Los Angeles County Office of Education and the Los Angeles County District Attorney’s Office. What’s more, the California Public Employees’ Retirement System also is investigating the matter.

Cox, a longtime administrator in Centinela Valley who is serving as interim superintendent during the multiple probes into Fernandez’s compensation, did not dispute that it appears Fernandez took out the insurance policy before the board approved it.

“This was a district that was driven by one person,” he said. “Now, board members and even senior administrators are trying to come out from under that and to figure out how to do the right thing. That’s what’s going to happen here, and it’s going to be painful for a while, but we’re going to have to show that it’s not business as usual.”

It’s unclear whether that sequence of events amounted to a breach of state education law. Officials from two agencies — the District Attorney’s Office and the county Office of Education — declined to weigh in. Both agencies are refraining from making any further comments until completion of their probes.

Teachers union President Jack Foreman has long sounded the alarm on the policies, saying they are hidden income for Fernandez.

“It’s a gift of cash, but it masquerades,” he said. “The reason it builds cash value is you’re paying a fortune in premiums.”

By Rob Kuznia

Across California, Jose Fernandez, the embattled superintendent of the Centinela Valley high school district, has become well known for his extraordinary compensation.

But inside the boundaries of the tiny district serving three schools in Lawndale and Hawthorne, he was feared, known as a shrewd political creature unafraid to mete out punishment to perceived foes.

“With employees, it was an atmosphere of fear,” said Pat Springer, a former public relations employee in the district who is now the president of the Hawthorne/Lennox Rotary Club. “People were afraid to say anything to anybody, because Jose had people — let’s just say spies.”

Among the current and former employees who say they paid a price for being out of favor with Fernandez are assistant superintendents, principals, directors, secretaries and teachers. Sometimes, they paid with their jobs. Other times, their lives were made miserable.

Teachers union President Jack Foreman said the pattern was established early on in Fernandez’s tenure, which began in 2008. That year, he said, Fernandez demoted Fe Woods, principal of the adult school, sending her to an awful assignment.

“He didn’t like her,” Foreman said.

Woods was reassigned midsemester to supervising the dreaded guidance room at Leuzinger High in Lawndale. The room, which no longer exists, was a kind of purgatory that housed students who’d been kicked out of class.

Foreman said Woods was so distraught she called an ambulance.

“I can see why,” he said. “How would you feel if you were a principal one day, and all of a sudden you have been ordered to one of the worst jobs in the school district, with tough gangbanger kids? And she was elderly.”

Reached on his cellphone Friday, Fernandez declined to discuss the charge about the retaliatory environment. But some current and former employees say it felt like they worked in a police state.

‘A LIVING HELL’

“He made my life a living hell,” said Kathy Dragone, a former associate principal of the Centinela Valley Adult School, who later filed a whistle-blower lawsuit against the district alleging harassment. The case was settled out of court.

“If I would engage in conversation with anyone Fernandez did not like, within minutes, I would have an email or call from (then-Assistant Superintendent) Bob Cox warning me that my job was being jeopardized by the conversation.”

Vanessa Martinez, the district’s former director of human resources, said she quit when Cox informed her she’d lost Fernandez’s trust by attending a cake-decorating class with an employee who was on the outs with Fernandez. Martinez and the employee lived in neighboring apartment units and were friends.

“They can’t tell me who I can socialize with after work hours,” said Martinez, adding that Cox often looked out for her, but there was only so much he could do. “I figured I’m going to be on the next layoff list, so I resigned. I wanted to walk out with my head up high.”

Vicente Bravo, once an award-winning principal at Lawndale High and a former administrator in the district office, questioned the legitimacy of the cellphone and mileage allowances given to all managers — as well as the school board — even though they boosted his own salary from $133,000 to $141,000.

After raising concerns, Bravo was demoted back to the classroom. He now works as an administrator in the Los Angeles County Office of Education.

CIRCUMVENTING RULES

Sources say the administration — under Fernandez’s rule — went to creative lengths to circumvent union rules when ridding the district of perceived agitators. Targeted employees might be let go and their job titles changed, so the district did not have to rehire them later. Or entire departments might be gutted to take out one employee.

“The superintendent was really good at keeping his enemies closer,” said Cesar Perez, president of the classified union representing nonteaching staff. “For many years the union was silent because of his fear tactics. He was effective: Nobody wanted to lose their job, especially in the recession.”

Perez said the district once laid off three computer-lab technicians — one for each at Lawndale, Leuzinger and Hawthorne high schools — just to get rid of the one at Leuzinger. The labs were shut down.

A former top-level administrator said the same thing happened to teachers. The former cabinet member, who spoke on condition of anonymity, said Fernandez during the 2008-09 school year demanded that seven teachers be laid off so as to get rid of an art teacher from Lawndale High whom he didn’t like. (The law requires the district to lay off teachers based on their level of seniority.)

“People who wouldn’t normally have gotten pink slips, including him, got pink slips,” the former administrator said, “and they didn’t get their jobs back.”

Sources say the same fate befell a group of physical education teachers when the district decimated its P.E. program in 2011. The move took advantage of a loophole in the law that enables school districts in California to require just one year of P.E. in high school instead of the customary two.

But some believe the move was a retaliatory measure for the confrontational approach taken by then-teachers union President Betty Setterlund, a P.E. instructor. She didn’t lose her job, but seven P.E. instructors did.

“(Setterlund) made Fernandez front page news in 2010 with his contract and incentives package and some personal business,” said Greg Fuller, one of the laid-off P.E. teachers, referring to a story that ran in the Daily Breeze at that time. “I was at Lloyde Continuation High School and heard that Fernandez was very upset and going to pay P.E. back.”

Interim Superintendent Cox has said the district intends to reinstate the second year of P.E. come fall.

SETTING THINGS RIGHT

Cox acknowledges that, in general, hiring and firing mistakes were made under Fernandez’s leadership. Cox said he and the cabinet have been meeting with the teachers and classified unions in an effort to correct them.

“What we have vowed to do is make sure it is not business as usual,” he said. “Our intent is to clean up some of the problems of the past. And we made some commitments to them that we would look at layoff lists. ... We hope our actions speak more loudly than our words.”

Even Cox — who was widely viewed as Fernandez’s enforcer — said he feared for his job at times.

“Certainly there were times when my message to the superintendent was not favorably received, and I worried that that could affect my situation here,” he said. “Particularly in the early years.”

Meanwhile, Martinez, the former human resources director, said Fernandez’s demands would occasionally cause her and Cox to trade a look of disbelief.

“It was a little reign of terror,” she said. “When I tell people I left, they say, ‘Why would you leave a job like that, when you made more than $100,000?’ I’d say: ‘You don’t understand.’

“I think people will now understand.”

By Rob Kuznia

In 2012, Centinela Valley school district Superintendent Jose Fernandez roamed the halls of the Lawndale High School campus, not to visit classrooms or address teachers about education matters.

Instead, he was looking for a spare office to house a new employee named Lesley Cruz, who was romantically involved with school board President Hugo Rojas. Cruz had just been hired as a consultant to fill the school’s counselor position for special-education students; the vacancy was the product of a recent layoff.

Cruz landed the $75,000-a-year job despite the fact that it hadn’t been posted. The teachers union would later file a grievance, and Cruz would eventually be removed. But Fernandez found a way to hire her again.

The hiring and rehiring of Cruz are part of a pattern that fed a widespread perception in Centinela that board members loyal to Fernandez were part of a crony club. Critics say the main players in this quid-pro-quo system included two board members, the superintendent, a mysterious new charter school for adults and a well-known South Bay nonprofit that helps unemployed residents find jobs.

“Fernandez was very good at appointing people and putting them in spots to cover his back,” said Cesar Perez, president of the classified union representing nonteachers. “That guy was smart.”

Reached on his cellphone, Fernandez declined to comment.

CRONYISM OR SMALL-TOWN CONNECTIONS?

But where the critics see signs of cronyism, some who benefited said in interviews that the arrangements are merely the product of the cross-pollination that happens in a small town.

A key player in the Centinela job matrix has been Jan Vogel, executive director of the South Bay Workforce Investment Board, a government-funded job training and recruitment organization based in Inglewood. Both Rojas and fellow school board member Maritza Molina found their current jobs through Vogel’s organization or its sister agency, Centinela Youth Services, which offers services to troubled juveniles and families, and has no relation to the school district.

In August 2010, a few months after Molina and Rojas were elected, the Centinela Valley school board hired Vogel’s daughter, Camille, to work as a secretary for Fernandez. In that post, the younger Vogel — who beat out 11 other applicants for the job — made $55,000, according to documents from the Los Angeles County Office of Education. Three years later, Vogel was promoted to her current post as the events planner at the Centinela Valley Center for the Arts on the campus of Lawndale High School. She makes about $74,000 in that capacity, documents show.

Perez said he believes both the hiring and promotion were the product of nepotism.

“It’s all about personal relations Mr. Fernandez had with Mr. Vogel,” he said, noting that the two go way back. “That’s a personal favor.”

Kristen Aldrete, a former secretary in the district, says she believes Fernandez engaged in technical trickery to get around last-hired-first-fired laws to ensure that other secretaries with more seniority — such as Aldrete — would be laid off before the newly hired Vogel. Aldrete was laid off in April 2012 after working as a secretary in the district for 10 years.

“It was well known who her father was,” she said.

Adding to the intrigue is the fact that Bernie Konig, director of the personnel commission in charge of vetting applicants for many nonteaching positions at Centinela Valley, is close friends with Jan Vogel. The two have known each other for decades.

But district officials say Konig and the three commissioners followed protocol in processing Camille Vogel’s application. She was among 12 candidates who took a written exam for the secretarial position and 22 candidates who took a verbal exam for the events planner position. In each case, per protocol, the top three candidates were sent to Fernandez to be interviewed, said Bob Cox, Centinela Valley’s interim superintendent.

“The process was followed,” he said.

Jan Vogel says it is unfair for a regular employee such as his daughter to get dragged into a political scandal.

“I just don’t know how she and I became part of the story,” he said. “She’s just an employee. ... She applied for the job, took the test, did good on it and got hired. Another job opened up, she applied, took the exams and got it.”

He added that she has done a fantastic job.

“She’s raised hundreds and hundreds of thousands of dollars working day and night at that performing arts center,” he said.

Vogel acknowledged his friendship with Konig.

“It’s kind of a small community,” he said. “I’ve been here a long time and I know a lot of people. ... I don’t ask for any favors — I don’t want any favors.”

BOARD MEMBERS INDEBTED

But critics say the dynamic among Fernandez, Vogel and the board was such that elected board members were indebted.

In Molina’s case, she was introduced to Vogel by Fernandez himself. It was 2009, the year she ran for her first term on the school board. At the time, Molina was a 23-year-old recent graduate of UC Santa Barbara with no job and no car.

Vogel said Fernandez made the introduction at a function.

“He said, ‘She’s a nice girl and needs a job,’ ” Vogel said. “He didn’t ask me to hire her. He just referred her to me in case there were any jobs out there for her.”

As he routinely does, Vogel told Molina to send over her resume. He hired her as a part-time, Spanish-speaking tutor, and later as a mediator who works with troubled families through Centinela Youth Services.

Rojas, meanwhile, teaches a karate class on a contract basis through the Workforce Investment Board, which pays his salary. Vogel said Rojas held that job before he was elected in late 2009.

Back in 2009, both Molina and Rojas were part of a three-person slate heavily financed by a political action committee that was angling hard to oust Fernandez’s two critics on the school board. They prevailed that November.

The next month, in December 2009, the school board — with Molina and Rojas as brand-new members — voted to approve Fernandez’s controversial employment contract, which enabled him to amass at least $663,000 in compensation last year.

In fairness, Rojas in recent weeks has said he did not realize the perks in Fernandez’s contract would lead to such excess. Last month, Rojas, Molina and the rest of the board voted to put Fernandez on paid leave pending multiple investigations into his employment contract.

But prior to that vote, Rojas and Molina — as well as board member Rocio Pizano — went along with virtually every recommendation Fernandez made. Molina did not respond to requests for an interview.

BOARD MEMBER ABSTAINS

Because of Rojas’ relationship with Cruz, he abstained from the August 2012 board vote to hire her as a counselor at Lawndale High, according to minutes of the meeting. He abstained again in February 2013, when the board voted to boost her $67,830 salary by $6,800.

Sources say Cruz clashed with the principal at Lawndale High in part because Cruz was reportedly texting with students. The purpose of the correspondence was only to set appointments, she said, but it nonetheless violated school policy.

Cruz consequently was transferred to Hawthorne High, where teachers union President Jack Foreman works as a guidance counselor.

In March 2013, Foreman filed a grievance on behalf of the teachers union.

“This was an illegal hire, as Ms. Cruz didn’t interview for the job, there were no other candidates interviewed, she may not be qualified, and she is not a CVSTA unit member,” the grievance states.

In an email to the Daily Breeze, Cruz said the union’s grievance was bad for the kids.

“What the teachers union failed to realize when filing that grievance was that their organizational survival move would be jeopardizing, prematurely terminating, and leaving unserviced, the mental health counseling treatment of numerous students served within the district for the mere purpose of opening up a slot for a credentialed union member/guidance counselor, untrained, minimally educated, nor licensed to practice or provide the mental health counseling services needed to groups and students with special needs,” she wrote.

In any case, Cruz was removed from the position and replaced by a counselor who is a member of the union and holds a credential to practice in a K-12 setting.

In recent months, she was hired again. This time, the employer was a brand-new charter school in Centinela Valley called Family First, which caters to adults who have dropped out of high school or were recently released from prison.

WAS SCHOOL A ‘PATRONAGE MILL’?

Fernandez is listed as the board president of the 8-month-old charter school, which exists as an independent entity within the school district. It is located next to Lloyde Continuation School, adjacent Lawndale High School.

For some reason, Cruz for a time was working at Family First through an office at Vogel’s Workforce Investment Board in Inglewood. Asked about this, Vogel said Cruz wasn’t working for him; Family First was renting the office space.

Although Foreman said he was reluctant to dredge up old battles, he did say that it appears Family First has been used to give out jobs for reasons expedient to Fernandez.

“(Family First) is like his patronage mill, meaning he can just dole out political favors through that school.”

Staff writer Sandy Mazza contributed to this article.

By Rebecca Kimitch and Rob Kuznia

Recently fired Superintendent Jose Fernandez had a reputation in the Centinela Valley school district for rewarding his friends and punishing his enemies within the district.

Now it appears he went to great lengths to help out his political allies from beyond the district as well.

With Fernandez at the helm, Centinela Valley awarded a $400,000 contract to a consulting firm that employed Eloy Morales Jr., an Inglewood councilman whose family has long ties with Fernandez.

Morales, who occupies the seat on the Inglewood council that Fernandez vacated in 2003, was responsible for more than half of the billing on behalf of the Solis Group, a Pasadena company Centinela Valley hired to ensure compliance with labor laws on school construction projects.

From 2010-12, Morales worked about 20 hours a week on the Centinela projects, according to detailed invoices obtained by this news organization.

And when Morales left the Solis Group, the contract appears to have followed him.

In late 2012, the school district terminated its relationship with the Solis Group in favor of another company, El Monte-based Pacific Resources Services. It turns out Morales left the Solis Group around that time to take a job at Pacific Resources Services, where he still works as a government relations director. Sources say the process to hire his new company was not competitive.

The invoices offer what appears to be the latest example of a cronyism culture that thrived under Fernandez’s tenure. Fernandez used his position to find jobs for friends, political allies and, on one occasion, a board member who later voted on his lucrative employment contract that gave him nearly $700,000 in compensation last year.

Despite having approved his contract, school board members say they were stunned by the initial reports of this news organization revealing the figure.

The board placed Fernandez on leave in April and hired a firm to conduct an internal investigation. The board fired Fernandez on July 8, but the process could take a month from then to play out, officials say. District officials have been mum about the findings of the internal investigation, but a probe by the Los Angeles County Office of Education concluded that Fernandez owes the district up to $256,000 for overpayments made to him.

Morales couldn’t be reached for comment. But sources say one of his main duties was to monitor contractors’ compliance with a local-hire policy stating that at least one-third of the workers on the job sites of school construction projects were residents of the district serving Hawthorne, Lawndale and Lennox. Duties of the two companies also included monitoring labor disputes, making sure contractors were paying union wages and generally monitoring the district’s project labor agreement, which ensures the district uses union labor on its construction projects.

The work Morales received through the firms apparently wasn’t the only time Fernandez tapped his friend for a job — or at least tried.

School board member Gloria Ramos said Fernandez attempted on multiple occasions to give Morales a six-figure position working for Centinela as a community outreach director, but backed off when she objected.

“I like Eloy,” she said, “but I just didn’t think it was right that he got a job for 100-plus grand when we were laying people off. Jose found another way.”

Board minutes show that in June 2010, an item to establish the new position of director of community outreach and intergovernmental relations was pulled from the consent calendar. In January 2011, the item appeared again, this time with a salary range of $95,000 to $118,000. It was approved, but the job was never posted. Interim Superintendent Bob Cox said he does not know if the job was meant for Morales.

To be fair, just because Morales billed for up to $140,000 a year in his job with the Solis Group doesn’t mean he made that much. In fact, Morales — who earns about $62,000 a year as an Inglewood city councilman — has indicated in election filings that his annual earnings from the Solis Group (and Pacific Resources Services currently) were less than $100,000. Still, Morales was by far the top biller of the 18 employees with the Solis Group who worked on projects in Centinela.

And it appears the game was rigged.

District sources say the Solis Group was hired in a competitive process that included three applicants, but they could not provide proof or further details of that process. And they said Pacific Resources Services was unilaterally hired by Fernandez himself in a process that was not competitive.

Because this work is considered a service and not actual construction, the district isn’t legally required to use a competitive hiring process, explained Sally Riley of the Construction Industry Force Account Council, a nonprofit coalition of contractors and labor unions that works to ensure projects comply with the law. But though it isn’t required, Riley and the council still recommend that school districts use a competitive process before awarding a contract.

“That is the best way to know you are getting the best bang for the public bucks, the cleanest way to do it,” Riley said. “They don’t have to, but I would personally tell a district that it is not good policy. It can cause perception problems that it was an inside job.”

Fernandez’s relationship with the Morales family dates at least as far back as the late 1980s. In 1989, Fernandez was elected to the Inglewood City Council, becoming the first Latino to earn a spot on the panel — even though Latino residents at the time made up a slim majority of the city’s population. Sources say Morales’ father, also named Eloy Morales, played a big role in getting Fernandez elected.

The elder Morales ran a soccer league for kids and encouraged parents to vote for Fernandez, said Diane Sambrano, a longtime government watchdog in Inglewood.

On the morning after Election Day, the Daily Breeze ran a photo showing the elder Morales celebrating with Fernandez, who’d just made history with a decisive victory.

More than a decade later, in 2002, it appears Fernandez groomed Morales’ son, Morales Jr., for his council seat. Months before voluntarily stepping aside in 2003, Fernandez nominated Morales Jr. for positions on the Aviation Commission and Planning Commission.

“Eloy was essentially put into District 3 to replace Jose when Jose decided not to run again,” Sambrano said. “He considers (Jose) his mentor.”

By this time, Fernandez had been working in the Centinela Valley school district for three years as an adult education administrator. In early 2008, a dust storm of administrative firings and political maneuvering catapulted Fernandez into the top job of the financially troubled school district. The board made him the permanent superintendent nearly a year later.

Around that time, voters in the district approved the first of two $98 million construction bond measures to improve dilapidated Lawndale, Leuzinger and Hawthorne high schools. The second was approved in November 2010.

Though the contract with Solis Group allowed the district to spend up to $400,000, it ultimately wound up paying the firm about $250,000 a year from 2010-12. Nearly 20 employees worked on Centinela projects, but Morales was by far the top biller.

In 2011 and 2012, the Solis Group billed the district for an average 36 hours a week — nearly the equivalent of one full-time employee — to monitor labor compliance for its $196 million construction bond. Morales, who has a law degree, was responsible for more than half that, averaging 21 hours a week at $125 to $130 an hour.

By comparison, the Los Angeles Unified School District has three full-time employees working to ensure project labor agreement compliance for its $19.5 billion construction bonds — 100 times the size of Centinela’s bonds.

Sources at the district say Centinela switched to Pacific Resources Services to save money. But the district spent $252,000 in 2013 — essentially the same amount it spent on the Solis Group. Under its agreement with Pacific Resources, the district pays a flat $21,000 a month. Although this is on par with the average amount paid to the Solis Group, sources say the Pasadena company had planned to raise its rates to $29,000 a month.

Pacific Resources is owned by Benjamin Ocasio, who started the company in 2011 after serving as the Solis Group’s chief operations officer.

Some question whether Centinela needed to even hire either company to monitor labor compliance.

Bryan Berthiaume, executive director of the nonprofit Foundation for Fair Contracting, explained that project labor agreements are self-enforcing, because if there is a problem, union reps will certainly bring it to a district’s attention.

State lawmakers recently established a compliance monitoring unit to ensure that public works projects comply with labor laws and prevailing wage requirements. However, projects with project labor agreements were exempt from monitoring by this unit because they already have a self-enforcement mechanism built from the labor agreements, Berthiaume explained.

Before the compliance monitoring unit was established, hundreds of private companies and consultants were certified by the state to monitor labor compliance in public works projects. However, a 2007 report by the Legislative Analyst’s Office found that third-party labor compliance programs were both costly and ineffective, sparking the Legislature to establish the compliance unit, explained Eric Rood, assistant state labor commissioner.

Hank Springer, who taught an apprenticeship class in Centinela that prepared local residents to work on the district’s construction projects, said Morales’ main duty seemed to involve combing through paperwork to make sure workers hired by the contractors lived in the right ZIP codes.

“His only job was to make sure the unions hire a 30 percent local hire,” he said. “Honest to God, it was a clerk’s job.”

Representatives from the Solis Group did not return repeated calls from the Daily Breeze seeking comment. But Ocasio of Pacific Resources said his company, which has 3 1/2 employees, often mediates disputes between contractors and workers who say they’ve been shortchanged. As for his rates, he says they are justified.

“The billing rate I charge my clients includes everything: labor costs, my cost of travel … all the things associated with running a business,” he said. “It covers everything from labor to a paper clip.”

He added that full-scale investigations can be costly.

Vince Madsen, the facilities director with the Wiseburn Unified School District in west Hawthorne, said contractors exempt from competitive bidding can be “billing machines.”

“There are probably stories all over the place where a board member knows some guy and a firm gets hired,” he said, adding that he doesn’t know enough about the contracts in Centinela to comment on this particular case. “There’s nothing anybody can do about it because it’s not breaking any laws, because it’s a service agreement.”

Cox said while he was not directly involved in construction during Fernandez’s tenure, he believes the end result of the four-year period of construction will be impressive.

“I have recently toured the new buildings on all three campuses and think we have much to be proud of for our district,” he said. “Our students and their families will be pleasantly surprised when school starts on Aug. 20.”

By Rebecca Kimitch

A mounting recall effort, criminal investigations by federal and local law enforcement agencies, pending lawsuits on multiple fronts — despite it being nearly a year since former Superintendent Jose Fernandez’s staggering compensation was exposed, troubles at Centinela Valley Union High School District linger.

For months, if not years, to come, this small, low-income district will face the fallout of Fernandez’s exceptionally generous contract. That contract granted the superintendent a total compensation of $750,000 last year as well as other rare perks — including a low-interest home loan soon after he declared bankruptcy — in exchange for overseeing four high schools and 6,600 students in Lawndale and Hawthorne.

Still, district officials are taking steps to move Centinela past the scandals that landed it in headlines all year, which also included revelations of cronyism, news that the school board was being paid four times what is legally allowed, and reports that the district was spending excessively on law firms.

Interim Superintendent Bob Cox said since Fernandez was first put on leave in April, he and the other assistant superintendents have made every effort to focus the district’s attention on the business of education.

“Every decision we make, we ask the question: how will this affect students?” he said Monday.

District officials hope to name a new permanent superintendent in late February — a full year after this newspaper first exposed Fernandez’s high compensation and six months after Fernandez was fired.

But it will take a lot more than a new chief for the district to get beyond its troubles of 2014.

INVESTIGATIONS PENDING

For starters, both the FBI and Los Angeles County District Attorney’s Office continue to investigate Fernandez and the district to determine whether any unlawful activity has taken place. Authorities refuse to provide any details about where the investigations might lead, but records requests by the D.A. earlier this year indicated the office is looking into a range of issues, from the compensation of Fernandez and board members to the district’s use of bond funds to its contract with a construction management firm, among other things.

Fernandez has long-held that his compensation was completely legal and approved by the school board. In October, he filed a wrongful termination claim with the district alleging the board had no cause to fire him, was using him as a “scapegoat” and “conspired to defame and humiliate” him “and to destroy his reputation and career.”

Indeed, board members, particularly former board President Maritza Molina initially defended Fernandez’s contract, saying he deserved his compensation for lifting the district out of fiscal insolvency, overseeing two school bonds and generally improving the district. Molina was part of a three-person bloc, which also included board members Hugo Rojas and Rocio Pizano, that seldom, if ever, questioned Fernandez’s decisions over the past four years.

But weeks after the news of his compensation broke, board members claimed ignorance, saying they didn’t know what was in Fernandez’s contract when they approved it in 2009; had they known, they would not have given it the OK, they said.

As public outrage grew, board members finally took action. Hundreds of angry parents, teachers and students packed board meetings demanding Fernandez’s dismissal, pointing out that as he was making more than even the country’s highest leaders, while parents in the low-income district work two and three jobs just to make ends meet.

Board members have never explained their specific reasons for firing Fernandez, though the decision came after they reviewed the results of a lengthy internal investigation conducted by the district into Fernandez’s compensation. District officials have so far refused to release details about the investigation, which cost more than $500,000, despite multiple requests from this newspaper and members of the public.

An advocate for government transparency has filed a public records act lawsuit against Centinela, alleging the district is violating state public records law by refusing to release the investigation. The case has been set for trial in July.

The district also faces a potential lawsuit from Fernandez. The school board rejected his wrongful termination claim in October, which means the ousted superintendent can now file a lawsuit against the district, though he has not yet done so.

LACOE AUDIT

One of the only inquiries into Fernandez’s compensation that has been made public was done by the Los Angeles County Office of Education (LACOE). While the agency’s audit concluded that Fernandez’s salary was largely paid in accordance with his contract over the past five years, it also found serious issues with his compensation. Among the findings: Fernandez claimed to have worked, and was paid for having worked, on holidays when the county office concluded it was “highly unlikely” he worked; Fernandez should not have received a second $750,000 life insurance policy from the district; and Fernandez’s tax forms understated his taxable income by at least $56,000 a year because of miscalculations of his imputed income as a result of his home loan and life insurance policies. It also determined he did not use a single vacation day in four years.

All told, the LACOE audit concluded Fernandez owes the district up to $256,000 for overpayments made to him.

The $750,000 life insurance policy came on top of a $1 million policy that the district was already paying for Fernandez. The superintendent took out the additional policy before securing approval from the school board to do so, which LACOE took issue with.

Notably, both life insurance policies were whole-life plans. Unlike term-life policies, which are more typical for employees and only offer payouts to beneficiaries in the event of death, whole-life plans work more like savings accounts. The premiums paid by the district can be cashed out, like the balance of a bank account. Whole life policies are more expensive — Fernandez’s policies cost the district nearly $100,000 annually.

The California Public Employees Retirement System also reviewed Fernandez’s compensation and determined what he and the district were reporting to CalPERS as the base of his future retirement was far greater than it should have been. While the district reported a monthly compensation of $19,279, CalPERS determined that figure did not comply with the California Public Employees’ Retirement Law. Instead, the agency figured his compensation, for purposes of determining future retirement, was $12,998 a month — more than 30 percent less than the district was reporting.

Fernandez, 54, who applied for retirement in November, has appealed this conclusion. The appeal will be heard by an administrative law judge whose ruling is subject to the approval of the CalPERS board. A CalPERS spokeswoman could not say when that hearing will be held.

CalPERS would not release information about Fernandez’s retirement pay rate because his retirement application has not yet been approved.

LOAN AFTER BANKRUPTCY

In addition to his generous compensation and perks, the district threw Fernandez a golden lifeline in 2012 — just when he needed it most. Fernandez was going through his second bankruptcy and had lost his family home when the district gave him a $910,000 home loan with no down payment to be repaid at 2 percent interest over 40 years.

The loan terms would be exceptional for anyone with excellent credit. They are unheard of for someone who has just gone through bankruptcy, according to mortgage experts. Experts predicted the generous terms will ultimately save Fernandez at least $100,000.

And while the timing was perfect for Fernandez, it was not for the district. That year Centinela laid off 46 teachers and cut its adult education program. It also cut spending on books and supplies by $700,000 to less than half of what it was in most years.

School districts sometimes lend incoming superintendents money to move into the district. But such a perk is unusual for a sitting superintendent, experts said. Plus, Fernandez did not buy a home in the district. His nearly million dollar home is in nearby Ladera Heights. That community boasts a median household income of $103,000, while the communities making up the Centinela Valley Union High School District range from $33,000 to $49,000 in median household income.

Still, whether any of this activity crossed the legal line is unclear. Fernandez and the district certainly had plenty of legal advice during his tenure, with Centinela’s legal fees amounting to as much as 10 times those of neighboring districts. During the last three years of Fernandez’s leadership, they averaged $1.7 million a year, or just over $140,000 a month.

The district regularly sought counsel from a dozen different law firms, some of which were involved in the crafting of Fernandez’s lucrative contract, though it is unclear who they represented during that hiring process. Some of those firms also made campaign contributions to board members and bond measures.

CRONYISM AND CAMPAIGN CONTRIBUTIONS

Fernandez also had a reputation for using district jobs and funds to reward his friends and punish his enemies inside and outside the district.

For example, he helped get school board President Hugo Rojas’ girlfriend a $75,000 a year job in the district. And some say Rojas and fellow board member Molina both got their jobs through a quid pro quo involving Jan Vogel, executive director of the South Bay Workforce Investment Board, a government-funded job training and recruitment organization. Fernandez introduced the two board members to Vogel and in August 2010, a few months after Molina and Rojas were elected, the school board hired Vogel’s daughter, Camille, to work as a secretary for Fernandez. She was later promoted to a $74,000 a year post in the district.

In addition, with Fernandez at the helm, Centinela awarded a $400,000 contract to a consulting firm that employed Eloy Morales Jr., an Inglewood councilman whose family has long ties with Fernandez.

But where critics see cronyism, some who benefited say the arrangements were merely the product of the cross-pollination that happens in a small town.

While Fernandez and his connections may have helped board members and their loved ones get jobs, it is the construction management firm TELACU that helped get some board members elected. In the two past contested elections, TELACU has poured large amounts of money into campaigns to elect their favored candidates who almost always win.

In 2009, the company donated $28,000 to a political action committee called Citizens for Better Schools, according to campaign finance reports obtained from the Los Angeles County Registrar-Recorder’s Office. The PAC, in turn, dished out $55,000 to buy mailers and other promotional materials touting three candidates: Pizano, Rojas and Molina. All three were triumphant, and though Pizano was an incumbent, Rojas and Molina ousted two incumbents, both Fernandez critics.

A month later, in December 2009, the new school board unanimously approved Fernandez’s generous employment contract. Not long after, the board voted to put another $98 million bond measure on the ballot. In November 2010, the voting public gave its assent. And TELACU was awarded the contract to manage the bond construction projects, as it had in 2008.

In 2011, the political machine fired up yet again, with TELACU putting political muscle behind two favored school board candidates. One, Lorena Gonzalez, succeeded in ousting incumbent Sandra Suarez, who’d become a vocal critic and general nuisance to Fernandez and the rest of the board.

POTENTIAL RECALL

While most of the spotlight over the past year has fallen on Fernandez, that could change in 2015. Though it has been slow to start, an effort to recall three board members, initially announced in August, is finally taking shape. Petitions could start circulating next month, said Kevin Schaaf, a former teacher working on his doctorate in education, who is spearheading the recall with his wife, Phuong Nguyen — an elementary school teacher in Lawndale.

Schaaf initially intended to target all four board members who approved Fernandez’s contract — Molina, Rojas, Pizano and Gloria Ramos. But he decided to drop Ramos from the agenda because she faces re-election in November. The others, on the other hand, aren’t up for re-election until 2017, after winning their seats in 2013 with no opposition.

“That is simply too long to give these people that kind of power,” Schaaf said. “That is three years they will have to continue to make bad decisions. It basically means abdicating any positive leadership for students who are in the district now, telling them they will have poor leadership until they graduate.”

So far, the board has endured the district’s controversies of the past year largely unscathed. It did come under fire in early April when reports in this newspaper revealed that the board had been getting paid $1,040 monthly — more than four times the amount to which it was legally entitled. In response, LACOE sent the district a cease-and-desist letter and the district quickly complied.

But a recall won’t come easy. To make the ballot, the petitioners must collect signatures from 15 percent of the registered voters in the district, a sizable swath that includes Lawndale, Hawthorne, Lennox and some unincorporated areas. In Centinela, that amounts to about 8,700 signatures.

Within the past 16 years, two attempts to oust school board members in Centinela both failed to make the ballot because of lack of signatures.

Still, Schaaf said the effort is worth it.

“The evidence against these board members is so overwhelming,” he said. “No one can defend that contract. It was such a waste of money and resources that should have been going to our students, simply indefensible. My wife and I can’t sit around the dinner table any longer and say, this is awful, this is inexcusable, and do nothing about it. Because that would be excusing it. If I want to teach children what is right and wrong, and what you should do when you notice something wrong, I have to stand up and do this.”