Lawsuit: SCCOE Schools Chief Jon Gundry Tried to Hide Income, Conceal Consulting Contracts

Santa Clara County schools chief Jon Gundry tried to hide $10,000 in income as well as secret contracts for close friends before firing a whistleblower last year, according to a federal lawsuit filed last week.

Micaela Ochoa, formerly the chief business officer for the Santa Clara County Office of Education (SCCOE), which oversees the region’s 31 public school districts, filed a 10-page complaint in Northern California U.S. District Court accusing the public agency and Superintendent Gundry of violating labor codes and her First Amendment rights, respectively.

Ochoa not only claims that Gundry tried to bully staff into covering up thousands of dollars in taxable income after moving here in the summer of 2014, but that he also, in coordination with SCCOE spokesman Ken Blackstone, intentionally violated the Public Records Act by failing to disclose public contracts in a timely manner, as required by law. When Ochoa voiced concerns, the complaint states, Gundry fired her in retaliation—a move that was done “without cause,” putting taxpayers on the hook for the last year of her contract, or $271,242.

“Our belief is [Gundry] is a guy who was handing out sweetheart contracts to his friend, and when Micaela blew the whistle on it he fired her,” says Ochoa’s attorney, Sonya Mehta, who works for the Oakland law firm Siegel & Yee.

Gundry took over the SCCOE in August 2014. He was hired at a salary of $295,000, and part of his compensation package included up to $30,000 in moving expenses. But, according to Ochoa’s complaint, Gundry became furious six months into the job when she and another former SCCOE business officer, Ted O, told the superintendent that some of his moving expenses should be considered taxable income because he used the money to buy “furniture and other items.”

The complaint states that on Feb. 13, 2015, Gundry told Ochoa that he was “screwed” by his SCCOE contract and needed to refinance his house in Southern California. Less than a week later, the lawsuit notes, Gundry berated both Ochoa and O, telling them that he would fire them both if couldn’t “trust” them, suggesting that he wanted them to change his W-2 to trick the IRS. Gundry reportedly told Ochoa: “I have to pay $10,000 in taxes! I don’t trust you or Ted O.”

Ochoa says she took her concerns—as well as a formal complaint from O—to Darcie Green, then-president of the county board of education. It’s not clear if Green took any action, but she didn’t seem concerned at a June 3 board meeting. Green refused to comment in an email Tuesday, citing “pending litigation.”

Gundry began to freeze Ochoa out of SCCOE business decisions in the following months, the complaint states. But in May 2015, new issues arose when San Jose Inside received an anonymous tip to look into Gundry’s consulting contracts.

A series of reports found that Gundry frequently concealed consulting contracts from public vetting by placing them just under a $100,000 threshold requiring board input. In one such case, Gundry gave consultant Mark Skvarna—who the complaint notes is “a close, personal friend”—a $99,999 contract, which was just a dollar short of the amount required to inform the board. Skvarna did not provide any documentation for work completed before or after Gundry attempted to pay him another $150,000 by discreetly placing a contract extension on the consent calendar. Items placed on consent are rarely reviewed or discussed in open session.

San Jose Inside started requesting additional records regarding consultants in June 2015, which is when Gundry and his spokesman, Blackstone, began hiding records, according to the complaint. As the chief business officer, Ochoa oversaw all contracts, but she says Blackstone never informed her or her colleagues of this newspaper’s records requests. In several emails she expressed concerns to Gundry and Blackstone that the SCCOE was not complying with the law, which requires public agencies to make good faith efforts to provide public records within 10 days. Those concerns were ignored.

It wasn’t until 10 days after the District Attorney’s Office requested the same records as San Jose Inside that the SCCOE turned over all contracts, some of which by that time had been leaked and reported. One of Gundry’s secret consulting contracts again came in just a dollar short of the $100,000 threshold. SCCOE board members interviewed at the time were unaware of the costs.

The SCCOE called its failure to provide contracts an “oversight” and “unintentional,” but email records show that Ochoa repeatedly tried to get Gundry and Blackstone to provide the documents nearly two weeks prior to their release.

On July 1, 2015, two days after the SCCOE came into compliance by providing the records to San Jose Inside and the DA, attorneys from James & Stewart LLP contacted one of Ochoa’s staffers to meet “at the Biltmore Hotel rather than the SCCOE offices,” the complaint states. “Ms. Ochoa wrote that she was uncomfortable because such a meeting could interfere with the District Attorney’s investigation.”

A day later, Gundry terminated Ochoa’s employment and placed her on administrative lead until the end of the month.

“It’s a pretty open and shut case,” says Mehta, Ochoa’s attorney. “But there’s another level to this story—a lot of people who weren’t fired up and quit.”

Numerous SCCOE staff members left the organization last summer, including Ted O and general counsel Maribel Medina, who, like Ochoa, was fired without cause. Medina’s contract also had another year, costing taxpayers $288,973. As of this spring, Medina also had a wrongful termination claim filed with the SCCOE. Gundry told the Mercury News that both Medina and Ochoa refused to meet with investigators looking into a payroll mishap that dates back to 2010, well before both women started working at the SCCOE.

In response to phone and email requests for comment from Blackstone and Gundry, the SCCOE had communications/PR specialist Shannon Carr respond Tuesday in an email: “As a matter of practice, we are unable to comment on pending litigation,” she wrote. “Therefore, we must also decline your interview request.”

Shortly after this statement, Blackstone changed his email to an automatic “out of office” reply. Since the firing of Medina, the SCCOE has not hired an in-house attorney to fill the position. Consultant law firm Hopkins & Carley is expected to represent the agency in the matter.

Less than a month after Gundry fired Ochoa, the SCCOE announced that it was bringing back its consultant Skvarna—who temporarily quit following San Jose Inside’s reports—to fill her position. Ochoa’s complaint notes that the man who replaced her was given “$8,000 in moving expenses and a $40,000 increase in salary from what Ms. Ochoa earned.”

Ochoa is requesting to be reinstated to her position and punitive damages for violating her right to free speech.

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.

28 Comments

  1. Don’t you just love it when people working for the government don’t want to pay taxes that they stick the taxpayers with, on money they stole from the taxpayers?
    Did I say that right?

    • EG,

      You were too moderate.

      If lawmakers were bound by the same laws they pass for other folks, government would be a lot less expensive.

      And why aren’t these hugely expensive jobs put out for bid? There’s an organization — SCORE — for retired business executives (Service Corps Of Retired Executives). Lots of them miss managing an organization, and often volunteer for a token $1 a year. Most of those volunteer for various charities, but they could certainly do as good a job as these arrogant, self-serving clowns — and probably, do a much better job. Cheaper, for sure.

      If our electeds actually cared about the public that pays the bills, they would look for ways to cut spending.

      (Ha-Ha!! That last comment was funny, no?)

        • Now THAT’S a comment based on knowledge and FACT-base information. Seriously – to make a comment like that shows you have NO IDEA what is really going on behind those sliding doors at the COE. Next time you slime a Board member and the Supt – why don’t you find out for yourself. This article is BS – and since I walked those halls for nearly a decade, I know whereof I speak.

      • If you had to put up with the CRAP the Unions insist on, you’d want to make the big bucks too. Unions FORCE the Administration into less than acceptable agreements – to keep the bratty, violent, offensive kids in their seats – so they can get their $$, but you don’t hear anyone busting the chops of unions. We had SEVERAL people who showed up late, didn’t do their job, had a stack of complaints – but the Unions forced the COE to keep them on. When you have Union thugs running the show – you know it’s not gonna work out well for anyone.

  2. I wrote in about this con man last fall and asked why the Merc did not put this on the front page.

  3. Something is terribly wrong with that SCCOE Board! How have they managed to bungle the hiring of the last three County Supts? They should all be recalled! Their bad judgment cost us taxpayers thousands of dollars.

  4. FedUp might be on to something there! Green is definitely a political animal who has plenty of shady dealings of her own. That’s why she would turn a blind eye to that thief, Gundry. Mindboggling how these cheats make it to such high positions! And, at our expense! Why isn’t this on the front page of SJMercury News???

  5. Meanwhile, teachers cannot afford to live here. What exactly do these highly paid administrators and their legions of assistants do? This is as bad as the water guy, Goldie.
    I hope the DA pursues this instead of the new expensive mandatory sentencing proposal.

    • “What exactly do these highly paid administrators and their legions of assistants do?”

      They make it really hard for teachers to do their job, that’s what they do.

      I homeschool my child because of the highly paid administrators and politicians screwing up our schools. Teachers are awesome – the rest of the bunch at the top…not so much.

      Please don’t start some thread about how not everyone can homeschool…blah blah blah. I know that ,and it sucks we all can’t boycott schools, but we all make choices and some of us could choose to take our kids out and find an alternative way for them to learn.

      Some of us have said, “enough of this crap”. And some of us have made tremendous sacrifices to take our kids out of school and make sure that they actually get an education.

      And please teachers…I’m not upset at you. Like I said above, it is administrators and politicians that are screwing up the system.

  6. I like how a guy making $300k can complain about “getting screwed.” Seems like the only ones getting screwed here are us taxpayers.

    • I just don’t understand what justifies such a high salary. There is no lack of people willing and able to do this job for half the money, AND without cheating on their taxes and stiffing the public by siphoning money to his friends. I’m sure if we looked closely at his bank accounts we’d find a nice kickback from his consulting friend.

      The question is, who felt compelled to hire this loser? Because that person is also responsible and should be accountable for this unacceptable waste of money.

      • @Lord John – The elected Santa Clara County Board of Education hires the superintendent. In most county offices of education, the superintendent is elected, but not here. There seems to be problem after problem with superintendents hired and let go by our SCC Board of Education.

      • Do you live in the Bay Area? Do you KNOW what a home costs here? Do you know the education, background and knowledge of programs that is required for this position? This isn’t Kentucky or Louisiana, it’s the San Francisco Bay Area for heaven’s sake, not Arkansas. Do you SERIOUSLY think Gundry fired TWO people because they told him that a few thousand dollars of furniture would be added to his salary? SERIOUSLY??? Does that even make sense to you? The Board of Directors hired him – it’s not an election. have you met with him? Do you know his background? Before you act like the LORD – perhaps you should do your own homework. YOU… back to school for remedial education.

        • I know what a home costs here, and I know what people get paid here. There’s no justification for such high salaries. None. I haven’t met him and don’t know his background, but I know for sure he shouldn’t be getting this much. PERIOD. Maybe YOU should be doing your homework if you think a SOC should be getting paid this much. I think it’s high time the taxpayers get a little more insight into how much money we piss away into overpaying incompetent people. On another, unrelated topic: fuck you, asshole.

  7. Closest thing you can get to as a political official. So what, this guy will use a battery of attorneys all paid for at taxpayers expense and walk. And we talk about third world countries being corrupt.

  8. Ochoa was NOT fired because of this deal. I worked at COE for nearly 10 years. She should never have been hired, or minimally, released after 6 months. She sat on contracts for weeks/months – cancelling meeting after meeting with the one/only person she HAD to meet with in order to approve them. She finally released herself from the approval process – over a YEAR before any of this happened. This is PURE SPIN, people, you’re getting her side and her attorney’s side. Why not ask those who work/worked there for how it REALLY went down? As to the $40,000 salary difference, Ms. Ochoa is not Dr. Ochoa, or even have a M.A. degree – TYPICAL of most CFO’s. She was going to school on COMPANY TIME, and not recording that time away from the office, keeping her calendar private so no one could see … well, until she was called on it…and those spaces were then filled with “VACATION”. Many people complained about the Accounting dept – the dirty laundry being aired in the rags almost daily. The problems in Ochoa’s Dept are legendary – and many left because of HER. It was common knowledge the “2 Latinas” (Ochoa and Medina, SCCOE’s Legal Counsel) were in concert to bringing down Dr. Mary Ann Dewan. Why? Because Ochoa had her boxes packed and ready to move in to the Supts. office as the Interim – when the Board swung the other way and chose Dewan….. brother… it was ON, then!). When the dust settled – the 2 Latinas were out and Dewan was still standing – and in a higher position. As to the contracts – there is a hierarchy for approvals, based on price. This isn’t new. What IS new is that along the way – flooded with screaming vendors, helpless employees trying to complete the contract process, only to have them bottle necked in an overworked/under-producing CFO… she tossed her hands up, pushed them off her desk, stating: Let the Chief’s approve them… and removed herself from the process. If you read something in media places like this….. do yourself a favor: believe half…. and then cut THAT in half. Not much of what I read resembles what most of us lived thru under Ochoa’s brief, but not brief enough, tenure.

  9. How come both Ochoa (the CFO) and the Legal Counsel (Medina) refused to look into those issues? What were THEY hiding? More likely they knew what was going on. Maybe Gundry hired someone he could TRUST to look into it and tell him what REALLY happened? Considering it was before HIS time in the Supt. seat as well….. And maybe after someone he TRUSTED told him how bad it was – heads started rolling. Perhaps they were offered the door instead of the truth coming out and ruining their chances in the next chair they occupied.

  10. “Ochoa is requesting to be reinstated to her position and punitive damages for violating her right to free speech.”

    Free speech? How about violating her duty to do her job? She deserves the gratitude of the taxpayers. Now another question is how come we have so many jobs that pay $300K/year in there while teachers barely make a living wage.

    • Free speech? That’s what she’s leading with? And wants her job back? Interesting she isn’t working as a CFO – but a District Supt. Apparently she’s not qualified for a CFO position – which was PAINFULLY obvious to those of us who worked with her. Teachers – good as they are – need an AA or a BA degree in early ed. they’re TOLD what to teach – they don’t problem solve. The Unions pull their strings. Where as REAL exec’s – Supt’s, Chief’s, CFO’s actually have to problem solve. Find the issue and FIX it before the State or Feds come knocking – like they did at SCCOE’s door, because those reporting to Ochoa weren’t doing their jobs. She’s just pissed because she got reemed for not doing her job – not because she told a guy who makes close to $300,000 that he might have to show $2,500 of added income. Even a high schooler can see Ochoa is reaching for straws.

  11. It’s not entirely Micaela’s fault. There was a reorganization at the time and Business branch was chopped up to create a separate Technology branch, complete with competing goals, agenda and budget. She could only do too much.

  12. Where on earth do they find these crooked, inept bureaucrat dunderheads to run county school offices of education? Gundry’s counterpart in El Dorado County was arrested and convicted several times of DUI – while on the job during weekday working hours – one time having fallen asleep at the side of a highway. What do they do for “work” for the taxpayers? Hand out bountiful contracts for pencils, scissors, and blackboard chalk? Another useless, overpaid, non-essential government function pouring time and money down the drain while feathering their own nests.