Political Buzz

Talking WA politics.

NOTICE: Political Buzz has moved.

With the launch of our new website, we've moved Political Buzz.
Visit the new section.

Nonprofit at center of Seattle schools’ financial scandal has ties to City of Tacoma employee

Post by Lewis Kamb / The News Tribune on Feb. 24, 2011 at 3:57 pm with 6 Comments »
February 24, 2011 5:48 pm

(Staff writer Debbie Cafazzo contributed to this blog post)

A Seattle Public Schools’ financial scandal that has prompted an ongoing criminal investigation has indirect ties to a longtime City of Tacoma employee, records and interviews show.

No one is accusing city employee Percy F. Jones, Jr of wrongdoing.

But state records show Jones, who coordinates the city’s Historically Underutilized Business Program, is listed as a registered agent and one of three governing members of the nonprofit at the center of the scandal: the Regional Small Business Development Program.

Public funds diverted into the private nonprofit’s bank account triggered a state audit last year, after Seattle school officials questioned a $35,000 check that Tacoma Public Schools wrote to the Seattle School District.

Seattle officials wondered why the Tacoma schools’ check – intended as payment for training provided to potential women- and minority-owned business contractors – was deposited with the private group instead of with the school district, interviews and records show.

The money from Tacoma schools was returned to the Seattle district after a police report was filed, but school officials still alerted the state auditor’s office, an auditor’s report now says.

In all, a state audit report released this week found nearly $1.8 million in questionable spending by the Seattle School District in connection with Jones’ nonprofit and to the school-funded contracts his nonprofit awarded to private vendors.

State Audit Report of Seattle Public Schools’ Spending Tacoma Public Schools is not implicated in wrongdoing, according to the state auditor’s office. Seattle police, the King County Prosecutor’s Office and Seattle Public Schools are now investigating the matter.

According to The Seattle Times, Silas Potter, a former Seattle Public Schools employee who is registered as the chairman of the nonprofit, has emerged as a key figure in the investigation:

The audit singled out former executive facilities director Fred Stephens, now working at the U.S. Department of Commerce, for failing to properly supervise program manager Silas Potter. Potter was one of the people who set up the private organization where funds allegedly were diverted, according to the audit.

Potter has since disappeared as investigators have sought to question him, The Times reported:

(Seattle school board attorney Patricia) Eakes said she has not been able to find Potter, who resigned from the district in June and then worked for a short time under a contract with the district. (State Auditor Brian) Sonntag said his office also had not been able to locate Potter.

Jones, who made about $75,000 in his city position in 2009, did not immediately return a phone call to his work office Thursday.

City spokesman Rob McNair-Huff said Jones is on the job and in the office today.
McNair-Huff added the Seattle Public Schools investigation “has nothing to do with the city, but (Jones) is a city employee.”

After receiving a media call about Jones Wednesday, city officials checked to see if any city money has been directed toward the nonprofit or another for-profit firm that Jones is involved in.

“We have not had any dealings that we could find with either of those companies,” McNair-Huff said.

City officials are also informally reviewing potential conflicts of interest and ethics issues involving Jones’s connections to the outside groups, McNair-Huff said.

“We haven’t come to any conclusions,” he added.

The city’s code of ethics states that city employees are prohibited from engaging in private employment or rendering of professional services “when such employment or service is incompatible with the proper discharge of official duties or would tend to impair independence of judgment or action in the performance of official duties.”

Some outside employment is allowed, McNair-Huff said, “but typically the employee’s supervisor would need to approve that.”

“We’re looking into if that happened (with Jones),” he added. “But I don’t have an answer yet.”

Jones was at the center of a 2004 city audit, during which an outside accounting firm found the city’s HUB program was rife with bookkeeping problems and missing records, and did not have any written standards in place for how the program is supposed to operate.

The News Tribune reported at the time:

But despite numerous examples of “sloppiness,” the audit by Moss Adams LLP found no evidence that the overall goals of the city’s Historically Underutilized Business Program had been compromised or that any businesses improperly received city money, said finance manager Steve Marcotte.

“The program itself has served the purpose it was set out for,” Marcotte said.

City Manager Jim Walton, who played a key role in the formation of the program, said it’s apparent from the audit that the program was overloaded with bureaucracy and that HUB administrator Percy Jones was asked to do too much.

“Something is going to fall off the plate,” said Walton, who added that despite the problems revealed in the audit, it demonstrated that “the integrity of the program was not compromised.”

Walton said the blame should be shared by everyone involved, including himself, Marcotte for failing to recognize that Jones wasn’t keeping up with the paperwork, and Jones for apparently not alerting those above him that he couldn’t keep up with the requirements.

“We’re all on the hook,” Walton said.

Leave a comment Comments → 6
  1. BigSwingingRichard says:

    Why, why, why is the Tacoma Public Schools sending a check to the Seattle school district for $35,000?

    TNT do some investigative journalism. Tell us why?

  2. tommy98466 says:

    This is what happens when the ‘playing field’ is leveled and public funds become available to squander. All in the name of diversity, of course. Scammers and illerates trying to manage others money and can’t figure what to do with it other then line their own pockets. Do you see the pattern folks? Fred Stephens is now working with the US Dept. Of Commerce. The USDC is headed by non other then Gary Locke former WA. Governor. These democrats are as thick as thieves. Money for this and money for that program for the poor and disadvantaged and all the time the poor people are the working fools paying the taxes for these fiascos. All this is coming to a head. In 2012 it will all end. Pathetic.

  3. mojjonation says:

    The only way it all ends in 2012 is if the world ends as predicted. Good luck with that. There will always be crooks. There will always be those looking for loopholes to use to their advantage. There will always be some other croook to replace the person who is convicted of wrong doing. It’s been going on longer than most of us have been alive. It will continue long after we all leave. Saying it is going to end in 2012 is a pipe dream.

  4. PumainTacoma says:

    BigSwingRichard; This is the type of non-profit quid pro quo going on at Tacoma Public Schools. Check how much they give to non-profits out of your tax dollars. Including Safe Streets. The city has given millions to these so called jobs programs (small business assoc. incubators hubs, urban league, black collective) organizations. And then we had the MLK Housing Authority under investigation from the FBI.

    The schools and the city should not be paying non-profits with our tax dollars it is the biggest scam running and the Seattle schools are now under the spotlight, but it is going on in Tacoma. All these so called in the name of children, poor and jobs non-profits that suck your tax dollars and provide little oversight and are ripe for review!

  5. PumainTacoma says:

    Where is the city manager Anderson on this matter? He has an employee profiting from the work in which he is paid for by tax payers. This has conflict, quid pro quo written all over it… Ethics? Where is the Tacoma investigation?

    City Manager Anderson and Mayor Strickland we are waiting?

    UBI Number 602995498
    Category REG
    Profit/Nonprofit Nonprofit
    Active/Inactive Active
    State Of Incorporation WA
    WA Filing Date 02/22/2010
    Expiration Date 02/28/2011
    Inactive Date
    Registered Agent Information
    Agent Name PERCY JONES JR
    Address 7032 S M STREET

    City TACOMA
    State WA
    ZIP 98408
    Special Address Information
    Address P O BOX 33403
    City TACOMA
    State WA
    Zip 98433

    Governing Persons
    Title Name Address
    Director Ibarra, Ralph 826 Algona Blvd
    Algona, WA
    Director Jones Jr, Percy 7302 S M Street
    Tacoma, WA
    Chairman Potter, Silas 31500 First Avenue S Ste 11302
    Federal Way, WA

  6. olympicmtn says:

    Why is the TNT not updating what the Seattle Times uncovered? Cover-up, editors censoring (again) or bad journalism?

    We have to read the Seattle Times to know what is going on in Tacoma including knowing the school district spent $140,000 for the Seattle schools sponsored Tacoma based minority small business organization that is under criminal investigation!

    Read more from the Seattle Times:
    Sound Transit, Tacoma schools spent $280k on suspect Seattle program


    Sound Transit and Tacoma Public Schools together paid $280,000 to a defunct Seattle Public Schools program that is now the focus of a criminal investigation, the agencies confirmed Friday.

    Sound Transit had two contracts totaling $140,000 from 2007 to 2009. Tacoma Public Schools had two contracts, one from mid-2008 to mid-2009, and the other from 2009-2010. The Tacoma Schools contracts added up to $140,000.

    Both agencies were listed as sponsors in a course catalog provided by the Regional Small Business Development Program, which was started by the Seattle Public School district to encourage small minority- and women- owned businesses to bid on government contracts.


We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part and abiding by these simple rules.

Follow the comments on this post with RSS 2.0