I assume that the Beverly Hills Unified School District isn't completely impoverished. Still, this is absurd. It personifies everything that some people think about government contracts:
"Karen Christiansen was employed as director of planning
and facilities for the Beverly Hills Unified School District
(District). Among her duties Christiansen administered the
planning, construction, and maintenance of the District’s school
facilities. She received a salary of $113,000 per year plus a $150
per month automobile allowance. Her written employment
agreement ran from February 2005 through June 2007.
In 2006, Christiansen lobbied District officials to change
her position from an employee to a consultant. A former member
of the Board of Education (Board) testified, “Ms. Christiansen
lobbied hard to move from the director of facilities and planning to consulting status.” In June 2006, Christiansen entered into a
new three-year contract with the District terminating her status
as an employee and naming her a consultant.
The new contract, however, did not change her duties. . . .
Pursuant to the contract, Christiansen’s two minor children
were considered children of a District employee for the purpose of
attending school in the District. Christiansen was allowed to
continue her use of the District’s email. . . . The contract set Christiansen’s compensation at $160 per
hour with a maximum compensation of $170,000 per year. . . . Christiansen formed Strategic Concepts, LLC (Strategic), of
which she was the sole owner. In early 2007, Christiansen
assigned her consulting contract to Strategic. . . .
McVeigh and Assistant Superintendant of Business
Services Cheryl Plotkin were required to review and approve
Strategic’s invoices. McVeigh described her relationship with
Christiansen as “friendly, friends.” Plotkin frequently socialized
with Christiansen. She attended parties at Christiansen’s home.
They went on two pleasure trips. At Plotkin’s request,
Christiansen obtained tickets to a show in Las Vegas for Plotkin
and her husband. They reimbursed her. Christiansen hired
Plotkin’s daughter to work for Strategic.
In spite of the $170,000 per annum contract limitation,
Strategic’s invoices were approved and paid in the following
amounts: $253,520 in 2006; $1,313,035 in 2007; and $1,390,804
in 2008. No one from the District alerted the Board about the
over-payments. The invoices simply appeared on the Board’s
“consent calendar”; that is, items that the Board does not usually
review on an individual basis.
When Christiansen discovered her contract and payments
were being questioned by the District’s Citizens’ Oversight
Committee, she emailed Plotkin: “Let’s just say that the contract
was developed by your attorney . . . . Please shut this down fast.” . . .
Christiansen’s friend was the District’s counsel, David
Orbach, and his partner, David Huff. Christiansen, Orbach and Huff were among a group of friends who often met for drinks
after work. In emails Orbach referred to Christiansen as “my
queen” and she referred to him as “my prince.” Christiansen sent
Orbach and Huff an unsolicited picture of herself in a black
bikini. The attorneys and Christiansen exchanged a number of
emails containing sexual innuendo.
On June 3, 2008, the District and Strategic entered into a
new consulting contract. The contract terminated on June 30,
2009. The contract it replaced provided for maximum
compensation of $170,000 per annum. The new contract provided
for compensation per an hourly rate schedule attached as exhibit
B to the contract. In addition, the contract provided for a
retroactive payment in an amount not to exceed $950,000 for
services performed between January 1 and June 30, 2008. . . .
Christiansen proposed that the
District retain Strategic for program and project management of
the projects to be funded by the bond. Christiansen proposed an
amendment to the 2008 contract that Strategic be paid $6 million
(2 percent of the $300 million project budget) for program
management and $10.125 million (4.5 percent of the construction
value of $225 million) for project management. . . . At a Board meeting in August 2008, Plotkin recommended
that the Board approve Christiansen’s contract amendment. The
Board approved the contract amendment three-to-one with one
abstention. No other bids were taken.
On November 8, 2008, the voters passed the $334 million
bond measure. On November 20, 2008, Christiansen sent the
first invoice for program and project management services in the
amount of $231,414.24. Between November 2008 and August
2009, Strategic collected more than $2,000,000 in management
fees even though no specific project had been approved."
Wow. The word "abusive" doesn't even come close to accurately describing these transactions.
Is today's Court of Appeal opinion about Christiansen's conviction for the above-described conduct? Nope. "Christiansen was prosecuted for a criminal violation of
section 1090. A jury found her guilty. She was sentenced to
more than four years in prison and ordered to pay the District
$3.5 million in restitution.
Division 1 of this court reversed the conviction in People v.
Christiansen (2013) 216 Cal.App.4th 1181. The court reasoned
that for the purposes of criminal law, section 1090 did not apply
to independent contractors."
Today's opinion is instead about her lawsuit against the Beverly Hills Unified School District. One that went swimmingly (for her, at least). "The jury awarded Strategic general contract damages of
$7,710,509 based on $16,125,000 in program and project
management fees less overhead and payments received. The jury
also awarded Strategic $6 million in special contract damages
based on the District’s actions destroying the value of Strategic.
The trial court awarded Strategic $4,310,660 in
prejudgment interest pursuant to Civil Code section 3287,
subdivision (b), and $2.3 million contractual attorney fees. The
total judgment is $20,321,169."
Thankfully, the Court of Appeal reverses. Because there's still a semblance of rationality in the universe. One in which someone like Christiansen doesn't receive an additional $20 million windfall.
