'Shadow of Suspicion'

For four years, Orange County has been famous for its high-profile bankruptcy. Thanks to former Brea city councilman Wayne Wedin, the county may now have a new claim to financial infamy.

A recent state report claims California's school districts have wasted millions of dollars on controversial construction projects over the past 15 years. The 144-page study mentions Wedin, who has made more than a million dollars on such projects, no less than 228 times.

Titled “Partnerships Between Public Schools and Private Developers,” the report was released earlier this month by Assemblyman Scott Wildman (D-Glendale), chairman of the state joint legislative audit committee. Public-private partnerships are envisioned by some California school officials as a faster way of building desperately needed new schools in a climate of shrinking resources. The strategy is to marry public school projects with private development, thereby creating revenue streams that can help pay off the original investment.

Wildman's report focuses on six construction projects that have been undertaken by various school districts and private developers in California since the early 1980s, beginning with a Brea high school project that broke ground in 1982. The report documents numerous problems with a series of joint ventures by the Los Angeles Unified School District (LAUSD), leading up to the ongoing Belmont Learning Complex project in downtown LA. Wedin worked as a highly paid consultant on all six projects.

Without mentioning specific individuals, the report appears to reflect directly on Wedin, whom LAUSD hired in 1988. “Many of the outside consultants and attorneys retained by the districts,” the audit committee reported, “were plagued by conflicts of interest, which may violate existing law and which clearly cast a shadow of suspicion on many of the districts' decisions.” The committee also found that “LAUSD staff, consultants and counsel have engaged in a pattern of misrepresentation and deception in order to pursue joint ventures.”

Based on those findings, the legislative audit committee recommended a series of reforms aimed at curtailing such excesses, which Wildman said he would pursue with the start of next year's legislative session in Sacramento. These recommendations range from withholding state funding to school districts that violate state guidelines on competitive bidding to investigating the alleged destruction of public documents by LAUSD officials. Wildman's report also recommends the investigation of “staff, outside consultants and attorneys for potential conflicts of interest, fraud and obstruction of justice within the LAUSD.”

In a recent interview, Wildman said that copies of his report-which has been widely derided by LAUSD officials-had been mailed to the state attorney general's office and the Los Angeles district attorney. Wildman refused to say whether any of the questionable activities detailed in the report constituted criminal violations. “That's something for a law-enforcement agency to decide,” said Wildman. “We're not attorneys.”

Nonetheless, the report does provide a detailed review of Wedin's career as a school consultant, beginning with his involvement in a 1982 school project for the Brea-Olinda Unified School District. The report also examined Wedin's role in a 1992 conflict-of-interest trial stemming from the then-councilman's relationship with a city contractor, Costa Mesa-based Keith Companies. Wedin was cleared of any criminal wrongdoing in that trial and left city government to pursue school consulting full-time. Of the five projects he helped put together for the LAUSD since 1988, the report concluded, none had been successful, despite Wedin having earned in excess of $1 million for his consulting work.

Many of the report's findings regarding Wedin mirrored accounts of the consultant's work that first surfaced in the OC Weeklyand LA Weekly. In early 1997, the LA Weekly exposed the fact that Wedin had been paid more than $1 million by the LAUSD for his work on several controversial joint projects. The report found that most of Wedin's work involved the Belmont Learning Complex. Under Wedin's watch, the project swelled to include not just a new school, but also a shopping center and affordable housing-elements that have since largely been dropped from the project in part, the report found, because Wedin misled school officials about the viability of private financing and city and state funding for the project.

Wedin's approach to choosing the developer for the Belmont project-simply choosing the development team he thought could best perform the job-was authorized by Dominic Shambra, then LAUSD's director of the office of planning and development.

However, this scheme-described by Wedin's admirers as “innovative”-skirted a state regulation requiring school districts to award such contracts to the lowest qualified bidder. Because of this oversight, state legislators have so far approved only minimal funding for the school's construction, saddling LAUSD with a much higher price tag than it had agreed to when Wedin first proposed the idea of negotiating exclusively with one development team.

In an interview with the LA Weekly last year, Wedin brushed aside such concerns, saying that he was in the process of helping to draft legislation that would make it permissible for school districts to forgo competitive bidding in favor of direct negotiations with a specific developer. That legislation passed but never took effect because of technical conflicts with state law. Meanwhile, in late 1996, Wedin urged the school district to select an Orange County-based architect named Ernesto Vasquez as the lead consulting architect for the lucrative Belmont contract.

In August 1996, Shambra concurred, asking the school board to authorize a separate contract with Vasquez, thereby allowing the architect to receive payment for his drawings, regardless of whether the ongoing negotiations over the school project were ever completed. Vasquez ultimately received $4 million from LAUSD-but not before he voluntarily resigned from his consulting job with the district to join forces with Temple Beaudry Partners, the Wedin-favored developer team that won the exclusive Belmont contract in September 1996.

In February 1998, the OC Weeklybroke another disturbing story about Wedin. In mid-1996, at the same time Wedin was sitting on the opposite side of the LAUSD negotiating table from Vasquez, the duo was also pursuing a separate project for the Republic of Panama-something neither Wedin nor Vasquez had bothered to tell LAUSD officials. Wedin's team won the deal, which called for the construction of new offices for the Panamanian legislature. With Vasquez, Wedin now stands to rake in millions of dollars on the project, which has been derided by local critics as the “Taj Mahal of the tropics” and stands to cost Panamanian taxpayers upward of $30 million.

That's still far less than the expected cost of LAUSD's Belmont project, which at a current price tag of more than $120 million ranks as the most expensive high school ever built in California. Controversy over the lavish project may help explain why Wildman's recent report on public-private partnerships began as a narrower probe of the Belmont deal. News of Wildman's upcoming investigation coincided with Shambra's decision in January to hand the LAUSD his resignation, which came shortly after the school board voted to revoke its $125-per-hour contract with Wedin.

Asked why the report focused so heavily on one individual-Wedin-Wildman explained that the OC consultant had almost single-handedly developed the concept of public-private alliances that the audit committee had decided to investigate. “There are no new incidences of conflict involving Wayne covered in our report,” stressed Wildman. “We did look at Panama and found that it looked questionable. But the real issue for us is that we don't see how any of these school projects have come to fruition. In the past 15 years, we have seen no successful joint ventures. I don't think we can afford another 15 years of experimentation. Let's get the schools built.”