Charter school founder Ref Rodriguez is running for the Los Angeles school board, seeking to beat incumbent Bennett Kayser. Kayser is known for his insistence that charter schools be financially transparent and accountable for their use of public funds.

The Los Angeles Times reported that the charter school chain co-founded by Rodriguez (who is its treasurer) is embroiled in financial scandal.

“A Los Angeles-based charter group awarded food-service contracts worth millions of dollars to a company partially owned by one of the schools’ high-ranking employees, a state investigation has found.

“The probe involved Jacqueline Duvivier Castillo, who is the director of business and development for PUC Schools and a part-owner in Better 4 You Meals, a company that has provided food to the charter group for the last five years. Investigators said the charter failed to demonstrate that the contract was “awarded properly despite the apparent conflict of interest.”

“Late Saturday, the charter organization said in an email to The Times that Duvivier Castillo would no longer be an employee of PUC….

“Duvivier Castillo failed to properly report her financial interests in the company. The company was ineligible for the food contracts because it lacked a health permit and relied on a subcontractor to prepare meals. PUC Schools did not select the lowest-priced bidder as required.
One of the area’s largest charter groups, PUC serves about 4,800 students in 15 schools, including in the east San Fernando Valley and north of downtown. PUC’s test scores typically compare well with nearby traditional neighborhood schools. It recently started a national organization that opened a campus in Rochester, N.Y….”

Charter officials said they were unaware of the conflict of interest but official documents showed otherwise.

“Tax documents for 2010 list the company as a vendor in filings signed by Rodriguez or Elliot. PUC, the documents said, was “party to a business transaction” with a “key employee.”

“The charter’s tax returns for 2012, however, no longer listed the company as a vendor.

“Company documents provided by the state show that Duvivier Castillo’s husband, Fernando Castillo, is a top official with the company, which provides meals for students at more than 100 charter and private schools.

“He could not be reached for comment.

“Annual audits paid for by PUC and released by the state indicated charter officials knew of the alleged conflict of interest.

“Additionally … PUC has signed a contract with a company that is one hundred percent owned by PUC’s director of business and development,” the PUC audit said. “PUC’s management believes that all transactions, including the bidding process, were done in arm’s length.”

“According to these audits from PUC, the charter group paid Better 4 You Meals more than $339,000 in 2011, more than $947,000 in 2012 and about $970,000 in 2013. No figures were available for other years.

“Charter officials reported to the state that Duvivier Castillo had a controlling interest in the company until 2014. She and her husband now have 19% stock ownership, charter officials said.”