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.