The Chicago school district is suing its former CEO, "who pleaded guilty last year to her role in a kickback scheme, and owners of two education training firms, seeking more than $65 million in damages":
The civil lawsuit was filed in Cook County Circuit Court as the third largest U.S. school district faces a cash crunch in June when a big teachers' pension payment is due, and a possible teachers' strike before the school year ends.
Barbara Byrd-Bennett, the former Chicago Public Schools chief executive, pleaded guilty in November to one count of wire fraud in a case involving $2 million in kickbacks and bribes she agreed to accept in exchange for a lucrative contract to train Chicago school principals.
The lawsuit also named Gary Solomon and Thomas Vranas, and their SUPES and Synesi education training firms which had won the contract. Solomon and Vranas have also been charged with crimes in the kickback case and their cases are pending.
With scarce resources, staff furloughs and painful budget cuts, CPS is keeping a close watch on every dollar," Forrest Claypool, who took over as the district's CEO in July, said in a statement.
"Barbara Byrd-Bennett and her co-conspirators knew the district's dire straits and still concocted this scheme to divert needed resources away from classrooms and line their own pockets," he added.
Claypool informed the school principals earlier this week not to spend any money because the district did not have enough money for the rest of the school year since it has to make a $700 million payment to the teachers' pensions.
The district has a debt rating as "junk" so any attempt to use bonds to get out of its financial situation would result in very high interest rates.