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BHUSD Spends Measure E Funds on Legal Fees

The district is using funds from the bond, which was sold to voters as a way to finance the repair of aging campuses, to pay for its outside legal costs to defend the BHUSD's interests in the Karen Christiansen case.

The Karen Christiansen and Jeffrey Hubbard legal cases have cost Beverly Hills taxpayers more than $1.6 million in legal fees in the last four months, Beverly Hills Unified School District officials revealed this week.

Christiansen, as Patch readers know, is the former BHUSD facilities director who has been ordered to  on two counts of misappropriation of public funds and four felony counts of conflict of interest. Former Superintendent Hubbard, who now serves in that same role in the Newport Beach Unified School District, was also ordered to stand trial on two counts of misappropriation of public funds.

The district spent $1,613,915 in legal fees for L.A.-based law firm Quinn Emanuel Urquhart & Sullivan between Dec. 21 and Feb. 9. Quinn Emanuel, which specializes in business litigation, has represented the district's legal proceedings against Christiansen and Hubbard. The Los Angeles County district attorney filed charges against the duo .

Assistant Superintendent for Business Services Alex Cherniss was grilled about the Quinn Emanuel charges by school board member Myra Lurie at a Wednesday study session. Cherniss was also asked about other legal fees spent in the last year. He confirmed that the district is spending Measure E bond money for Quinn Emanuel.

“As I have repeatedly mentioned in meetings since last year's budget discussions, I believe we are spending far too much on legal fees and I question the oversight of these costs,” Lurie said this week in an e-mail to district officials. “I am renewing my request to review all legal expenditures being charged to both the general and the Measure E bond fund.”

Legal costs associated with the Christiansen and Hubbard cases are being paid from Measure E—the $334 million bond measure passed by voters in 2008—because Christiansen oversaw the early stages of the bond's development, which was sold to voters as a way to pay for the modernization of BHUSD’s aging schools.

Lurie suggested Wednesday that all fees related to the charges against Hubbard instead come from the general fund, as Hubbard left BHUSD two years before the bond vote. Board President Lisa Korbatov disagreed, however, noting that “Hubbard [indirectly] caused Christiansen’s malfeasance because he supervised her.”

Hubbard may have done more than supervise Christiansen; between the two suggest they had an intimate relationship.

Lurie’s exchange with Cherniss also revealed that the district has spent about $85,000 in legal fees from the BHUSD general fund on efforts to persuade the Metropolitan Transportation Authority not to as part of the Westside Subway Extension. Board members Wednesday approved spending to fight the MTA, although they expressed hope that news of a new subway route through Beverly Hills could save the district that money.

Cherniss also noted that the district spent $231,000 in fiscal 2009-10 on Dannis Woliver Kelley (DWK), the firm that worked on issues relating to Measure E before BHUSD hired Quinn Emanuel. The district spent $494,651 on DWK between Nov. 6, 2009, and Jan. 5, 2011, which covers part of the current fiscal year, according to an estimate obtained by Patch. That money also came from Measure E funds. DWK, according to its website, is an education law firm that works exclusively in California.

Some observers find it ironic that Lurie is leading the charge to publicize the high legal fees being spent on the Christiansen case because she was part of the prior board majority that hired Christiansen. The previous board majority also awarded management of the Measure E fund to Strategic Concepts, the consulting company that Christiansen formed after she left BHUSD. 

I agree that there are questions concerning Lurie’s past decisions. Still, I applaud her efforts to shine light on the high legal expenses incurred by BHUSD and the fact that those expenses are being paid with Measure E money.  

Who in the district chose these law firms and who is reviewing these bills for accuracy? Patch will look into these questions and more in coming weeks.

Editor's Note: When this story originally ran, it stated that the $1.6 million spent in legal fees covered the last three months. The article has been corrected to read that those fees were incurred over four months, and that those fees can be attributed to money spent on both the Christiansen and Hubbard trials.

Ellen Lutwak February 18, 2011 at 07:49 PM
Agreed. Kudos to Lurie for "...her efforts to shine light on the high legal expenses incurred by BHUSD and the fact that those expenses are being paid with Measure E money." Good reporting.
Cathy Baker February 18, 2011 at 09:34 PM
When it comes to professional fees I believe it is prudent to have a continuous oversight plan in place. The amounts quoted seem astronomical. I wish there were as much oversight and discussion about how much our district can afford to pay lawyers as there is for how much it can afford to pay for education. I would rather see that money go to teachers and programs than to high priced lawyers. Has anyone investigated whether there are attorneys who are willing to charge our district less money? I personally worked hard to make sure Measure E passed so that our schools would be safe and secure. Now, I am uncomfortable watching these resources dwindle in the name of an indirect cause. Thank you Myra Lurie for bringing this issue to our attention.
Laurie Lande February 18, 2011 at 09:51 PM
Cathy, I too voted for Measure E and encouraged others to do so. Now I wonder if that was the right decision. Please email me directly if you would like to be interviewed on this topic.
Helene Harris February 18, 2011 at 09:59 PM
Thank you for writing such an even handed accessible account of BHUSD's legal expenses. I look forward to the next update.
Brian David Goldberg, PhD February 18, 2011 at 10:07 PM
It is funny to me how quickly people forget that this lawsuit is about the waste of Measure K and Measure E dollars. Looks like millions of dollars were mispent and overpaid to Karen and her firm. Where was the outrage from the community about that. The new board majority is working hard to recoup those dollars through the legal system. Every dollar we recoup goes right back to Measure E. I hope this helps remind people what took place and what is happening now.
Joan Farb February 19, 2011 at 01:33 AM
It's shocking that this much of the Measure E funds are being used in this way. I never knew this and I applaud Board Member Lurie for bringing this important information to the community's attention.
Harold Steinberg February 19, 2011 at 01:40 AM
$1.6 million in legal fees???? How many teachers would that have paid for????
Brian David Goldberg, PhD February 19, 2011 at 04:36 PM
Not one teacher as bond funds can only be used for capital projects as outlined in the bond language. It is important for people to understand that because of Christensen et al the district is going to have to spend up to 8 million dollars with Measure E funds for items not completed or meeting state requirements and having to rip out work paid for with Measure K funds. The district will never know how much money would have been wasted had we not ending our relationship with Christensen. This lawsuit gives the District the opportunity to try and recoup those funds and clean up the mess created by lack oversight from previous boards. Every dollar we recoup from our actions will go back to Measure E and the tax payers.
Kaye Clarke February 19, 2011 at 07:35 PM
Talking about adding insult to injury! I agree with many of the other commentors that the amount of legal fees seems exorbitant, and their being paid for with same funds in question seems like another case of misappropriation (in the spirit, if not the letter of the law). "Sunlight is the best disinfectant", and Lurie is to be applauded for calling for an accounting; not being in favor of full transparency and an attempt to ameliorate the expenses in this case is foolish at best, suspicious at the worst.
Daryl Mendelson February 19, 2011 at 09:01 PM
Yes, it is a shame that there was the initial "heist" by Christiansen et al. However, it is breaking a trust of those who voted for Measure E by spending those funds in an "attempt" to recoup misappropriated dollars. Someone else wrote that it should be remembered what the lawsuit is about and that "Every dollar we recoup goes right back to Measure E." To me this is like robbing a neighbor of cash with the promise of "don't worry, I will invest this money in something you've never asked for and iF (and only if) there is is a net profit, I will return to you what was righfully yours in the first place." Thanks but NO thanks... It should be a general funds issue. Corruption breeds corruption and in my book, additional misappropriations of Measure E funds that were voted for infrastructure falls into this category. I wish there were more whistle-blowers like Ms. Lurie. Citizenry need to be vigilant, shining the light on the clandestine mechanations of those who boast they know what is best for us and exposing the ponzi schemes they drag us into.
Jane February 22, 2011 at 04:58 AM
There should be a reality show about BHUSD and all their problems.....you couldn't make this stuff up.
Martin Perlberger February 22, 2011 at 09:28 PM
Did a anyone check recent reports of the Citizens Oversight Committee (COC) on the issue of legal fees and Measure E?
Marlene Stern February 22, 2011 at 11:47 PM
Wow- this is poweful stuff. Keep up the hard-hitting reporting. Marlene Stern
Miss BH February 24, 2011 at 09:18 PM
Honestly I don't even know why Brian David Goldberg, PhD should be aloud to post here. Didn't Ms. Lurie call him out when he was recently found guilty for fraud? Talk about the pot calling the kettle black. Also where do these recouped dollars come from? I read Christiansen is broke and Hubbard doesn't have that kind of money. Also according to articles it would have cost a third of that fire Christainsen in a proper manner. Ms. Lurie "TWO" Brian Goldberg "ZERO"
Laurie Lande February 24, 2011 at 09:25 PM
Hello. Patch encourages those whom we write about to respond. So of course Mr. Goldberg and anyone else is allowed to respond. I will be looking into how the district can recoup its money.
Miss BH February 25, 2011 at 02:46 AM
Laurie, Thank you we need someone to do that. Whats being left out is how the district got the measure E and another 9 million in the first place. This was something Goldburg has been against since the beginning and now he is succeeding in taking the district down with him.
Angela February 25, 2011 at 03:24 AM
Since people are talking about investigative reporting, why isn't anyone looking into Jerry Gross's undisclosed employment with Telacu EVEN when he was Superintendent of BHUSD. He caused the termination and resultant lawsuit, obviously for personal gain.
Miss BH February 25, 2011 at 05:09 AM
Actually Cathy they did have cheaper lawyers but they fired them

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