County Schools Chief Pushes Contract with Mystery Company

These days it’s easier to break the Internet than have zero presence on the web. But in an unusual set of circumstances, Jon Gundry, Santa Clara County’s superintendent of schools, has recommended a quarter-million dollar contract with a mystery company that has no trace of existence online.

In an under-the-radar memo Gundry placed on the consent calendar for Wednesday night’s Board of Education meeting, the superintendent recommended a $150,000 extension to a contract with School Business Service Consultants. No record of such a company exists online, according to search engines and a check with the California Secretary of State’s office.

Gundry’s recommendation would bring the Santa Clara County Office of Education’s total tab for consulting services with the company—owned by a man named Frank Butler—to a dollar short of $250,000.

The exact dollar amounts of the contract, and the fact that it was placed on the consent calendar, raise several concerns.

Since October 2014, Gundry signed off on two separate agreements with Butler’s company—the first for $50,000 and the second for $49,999. By keeping the total of those two pacts a dollar short of $100,000, the contracts did not require input or approval from Board trustees.

Gundry’s placement of this new contract agreement on the consent calendar is also significant, as Board trustees often approve these items without public discussion.

In a phone interview Wednesday afternoon, Gundry defended his actions regarding the contracts—first by putting the monetary amount a dollar out of trustees' reach; and second, by cloaking the item on the consent calendar.

Gundry said he drew up the single-source contract solely for the purpose of bringing on consultant Mark Skvarna, a retired superintendent from San Gabriel Valley. Skvarna, Gundry said, has been sifting through past audits while also working to fix the SCCOE’s broken payroll system, which was rife with mistakes and overpayments last year.

Skvarna has “a specific skillset” for sifting through financial documents, Gundry said, and he uses School Business Service Consultants as an intermediary for contracts.

A call to the company's phone number went to a voicemail that had no greeting. Online records suggest it shares an address with another company owned by Butler, Sunrise Petroleum Inc.

The Secretary of State’s website lists Butler as the owner of Sunrise Petroleum Inc., but it also notes that the Franchise Tax Board suspended his California business license.

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Gundry said he was aware of the companies' connection, but he could not explain how the two are related. He added that he believes School Business Service Consultants is a sole proprietorship.

Joseph Di Salvo, a Board of Education trustee who also contributes weekly columns to this site, told San Jose Inside that he was unaware of the company's history—or lack thereof—when reached for comment. Di Salvo added that he plans to pull the agenda item off of the consent calendar to get more answers.

“All of that concerns me,”Di Salvo said.

Gundry told San Jose Inside that he doesn’t consider the agreement to be “that unusual,” despite a lack of information on the company’s dealings.

“I didn’t intend for this to go on this long,” he said. “Hopefully, we’re not going to use this entire (dollar amount in the) contract.”

UPDATE: The agenda item to extend a contract with School Business Service Consultants by an additional $150,000 was pulled from the consent calendar by trustee Joseph Di Salvo on Wednesday night. It will be discussed by the entire Board at the June 3 meeting.

San Jose Inside will update this story when more information becomes available.

Josh Koehn is the managing editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected] or follow him on Twitter at @Josh_Koehn.

26 Comments

  1. Thank you to the reporter for bringing this to light. Don’t believe a word that comes out of Superintendent Gundry’s mouth. Dig deeper and you will find that he is the biggest liar. He is really a replica of the Milpitas City Manager, Tom Williams. You should see all the comments posted about Gundry in that story of sanjoseinside.com.

    If any Santa Clara County Office of Education employees have information to help this reporter, now is your time to speak out. Help save taxpayer dollars!!!

  2. From the County Board of Education web site:
    “The County Superintendent of Schools, Jon R. Gundry, provides leadership to the educational community and to the County Office of Education; serves as Chief Administrative Officer and Ex-Officio Secretary of the County Board of Education; and ensures compliance with all the relevant education laws, policies and regulations.
    The Santa Clara County Board of Education is the elected governing body of the Santa Clara County Office of Education. Its seven members serve four-year terms and are elected from different regions of the county.”
    Seems like Joe DiSalvo and his cohorts have not been as diligent as they should be in oversight of the Superintendent.

  3. He was hated during his tenure over in Pasadena…. watch him, this is his M.O. and cost that district so much money.

  4. Thanks Josh. That man is divisive and regularly throws others under the bus. When things go well, he takes all the credit but when things crumble, he is quick to publicly blame others. Look at Walden West. Who will he blame for this scam?

  5. I appreciate that DiSalvo pulled the deceptive contract. Gundry obviously has no respect for his 7-member board. Did he actually think they would approve such a scam? REALLY?! PLEASE! They aren’t idiots.

    • Really? Board President Green, member DiSalvo and cohorts have completely neglected their oversight of Superintendent Gundry. The only reason DiSalvo pulled the bogus contract is because the reporter, Josh, brought it to his attention. Josh saved them from approving it. Hopefully, this corrupt move by Gundry will be a wake up call to the Board of Education. Enough is enough!!!

    • If the County Superintendent and Board President prepare for board meetings anything like we do at the district level, then Board President Green knows about this spurious contract with School Business Service Consultants at least a week if not two in advance of the May 20th Board meeting. Typically, to prepare for a board meeting, the Superintendent and Board President go through each board item a few weeks prior to the actual board meeting, and they discuss them.

      If the two meet, then Board President Green either didn’t think the bogus School Business Service Consultants contract was odd or questionable, and asked no questions, or if she did, she turned a blind eye. Given everything else being reported about that Governance Team, I’d say it’s the latter. Go watch the board meeting on-line. Board President Green clearly wanted this bogus contract to move forward.

      I certainly hope that DiSalvo, and the new board members drill down into these shady Jon Gundry/Mark Skavarna/Frank Butler dealings.

      Oh and by the way, why would anyone publicly post their consultant’s social security number?

  6. WOW! Is this how he rips off the children of the district. I’m thinking so. What a shame this is not being corrected by the board. .

  7. I remember him in Pasadena and he wasn’t well liked by all parties. I talked a big talk, but never delivered. He never or rarely visited the schools in the district.

  8. There should be more transparency than this for government contracts of 250K. The contracted company should have an online presence and explain to the board how they will fulfill their contract with the Santa Clara County school board. Also, with that amount of money their should be a break down of costs per services rendered. Was there any competitive bidding involved and if so who were the other bidders? Common sense should prevail here.

    • Yeah, why not? It’s only the public taxpayer’s money. Jon Gundry knows he can get away with it. Why do you think he is asking for another $150,000 on top of the $100,000 he already gave away to his friend? The county board of education is not going to do anything about it.

  9. Maybe Jon Gundry’s alias is Frank Butler….seems contractor Frank (Butler) has no business license to work in California and is essentially invisible on the web or by any other known means. Seems Butler’s only contact is with Jon Gundry and his identity is questionable. Jeez!, the perfect scam!

  10. Well let’s see where Jon and family have been on vacation and how they paid for it. Or look in the parking lot and see what hot new BMW has Jon’s name on the sticker. Or perhaps there’s a new addition on his home that just magically appeared. Or perhaps he’s taking a page from Hillary and has a nice bank account someplace with questionable sources on how the balances were acquired.

  11. daal mein bahut kuch kala hai- plese translate from Hindi to English using google :) In India what we call people like “Butler” are “benami”- a front for you to siphon funds off from public funds into private pockets.

  12. Just to be clear, the SCCOE payroll system is NOT broken. What is broken is the management staff that is supposed to support the SCCOE district payroll department. This problem started in
    2013 with Micaela Ochoa, who is incompetent in her position of Chief Business Officer, and was under former superintendent Xavier De La Torre’s watch. Also contributing to this tragedy is the upper managment in Human Resources. Their job is to support office functions and prevent these types of situations. They were totally remiss in avoiding this problem. Additionally, these severe payroll issues were brought to each and every board member’s attention in early 2013, but they did nothing to stop or reverse the situation. Jon Gundry is taking steps to correct the hundreds of employee payroll and retirement records which includes recovering salary overpayments in 2013.

    • Just to be clear, the payroll system is not broken. . . anymore. What is broken are the morals of payroll staff who retaliated against suggested changes in their antiquated system by coordinating an outbreak of “blue flu”, who went out on medical leave for “stress”, who would rather track vacation and sick time with paper and pencil rather than entertain the thought of automating the system. The only thing Micaela Ochoa is guilty of is thinking that her employees would welcome changes that would streamline their work and save time and money. The multitude of gross errors that were discovered during the audit happened PRIOR to Ms. Ochoa’s arrival. She was the “lucky” person who had to call employees in and tell them that they owed the organization money. Jon Gundry had NOTHING to do with the steps in recovering salary overpayments. That was all taken care of way before he came on board. You wouldn’t know the truth if it bit you on the a$$, TruthTellingCitizen.

    • Nice try TRUTHTELLING CITIZEN GUNDRY SUPPORTER. Who said the payroll system was broken? Getting defensive? It’s unethical people like you and Gundry and Skavarna who are broken. Human Resources is on to you and your incompetence.

    • How does the sccoe’s board agenda #11E for June 3rd explain the bogus Butler/Skavarna/Gundry contract? What did they produce for $99,999? TRUTHTELLING CITIZEN – Go dig a hold, jump in, and stay there!

    • BROKEN WHO?
      Idiot “TRUTHTELLING CITIZEN”. The payroll information/technology system needs serious help and it is broken. The SCCOE QCC HR/Payroll/Financial System is a joke! Now, in terms of the $500,000 Superintendent Gundry and Internal Auditor, Judy Kershaw, have spent on consultants, contracts…. REALLY!?! Two years later, and Internal Auditor Kershaw is still “working on payroll audits.” REALLY!?! She is wasting our taxpayer dollars for 2 reasons; She is incompetent and she and Gundry are on a continued witch hunt.

  13. Gundry retaliates in very ugly ways. Rumor has it that the SCCOE Board of Education Board President gave him $30,000 about a year ago in moving expenses to move from Southern California up north to San Jose – on top of all his other perks. Interesting factoid, he never really ‘moved’. He still enjoys his house down here in LA – next to Pasadena.

    People are talking about how he couldn’t justify his bogus ‘$30 grand in moving expenses’ to the business staff to avoid paying taxes. Therefore, he had to pay taxes on it and went zany. I actually believe it because he regularly flipped out down here too. I’d hate to see how he’s retaliating against that staff for not letting him get away with that bogus move to avoid paying taxes.

  14. Gundry and Skavarna engaged in several unethical and illegal arrangements, as articulated by Josh. Here’s a recap:

    1. PERS requires 180 day wait period after one retires from PERS, before one can work, unless one gets a waiver. Gundry/Skavarna violated this requirement. Skavarna retired in October 2014 and started collecting checks from the SCCOE 2 months later. No waiver, no nothing.

    The irony? The County Office of Education is charged with approving those waivers for us at the district level.

    2. Gundry signed off on a contract with a company that doesn’t even exist!

    His General Counsel even warned him.

    3. Gundry signed off on invoices approving payment to a company that doesn’t exist, totaling over $90K in taxpayer dollars. A big chunk for travel.

    WHAT SERVICES DID SKAVARNA PROVIDE TO GUNDRY FOR $90 K?

    4. Gundry does not have anything to show for the $90K of taxpayer dollars he released –except for lip service, as he reported at the June 3rd board meeting.

    5. Gundry has been paying Frank Butler who has been part of scams and had his license revoked from the state.

    Is this how our County Superintendent manages our taxpayer dollars?
    When will the board take action to start restoring credibility? You 7 know what you need to do.

  15. In reference to the recent articles regarding Jon Gundry clandestine and unethical operations, it appears that he’s just continuing the practices of the Interim Superintendent Mary Ann Dewan.

    Exactly ONE YEAR AGO, PRIOR to Gundry’s time, San Jose Inside uncovered a similar situation of lies and corruption. However, this time the unethical activity was lead by Interim Superintendent Mary Ann Dewan.

    Check it out.

    http://www.sanjoseinside.com/2014/06/19/emails-show-office-of-education-committed-to-obfuscation/

    “Well, I think in response to requests and things of that nature and public records and/or media requests, we have been setting our processes here at the county office and looking to be compliant and efficient and take a global schematic approach across our department. Our efforts are more cohesive. We want to be responsive. That’s certainly our intention to be responsive. But we also want to make sure we’re compliant and efficient.”—Mary Ann Dewan.

    “Dewan’s robotic response says nearly as much about her “intention to be responsive” as the emails her office turned over—which included documents she and Blackstone withheld from previous requests for information.” — SJI

    “One email shows that Dewan, who got a $7,500 monthly raise on her $169,000 annual salary after receiving the interim superintendent tag, coached board member Beauchman for an interview with San Jose Inside while also providing invoices that were never turned over. In an April 11 phone call, Dewan told San Jose Inside that she would have cooperated more with the database story had she known we were requesting comment sooner. But emails show Blackstone—who refused to even meet with San Jose Inside before its story ran April 9—was blind carbon copying (Bcc-ing) her on emails as far back as late March.” — SJI

    My question to the Santa Clara County Board of Education, why do you allow this conduct? Why do you continue to put these types in leadership roles representing you? For goodness sake, clean it up.