Charlotte schools being investigated by multiple state agencies | Hour 2

What's going on? Thank you so much for listening to this podcast. It is heard live every day from noon to three on WBT radio in Charlotte. And if you want exclusive content like invitations to events, the weekly live stream, my daily show prep with all the links, become a patron, go to the Pete calendar show.com. Make sure you hit the subscribe button, get every episode for free right to your smartphone or tablet. And again, thank you so much for your support. Uh, I mentioned in the last hour when discussing the, uh, this slide into corruption. And maybe we should start calling ourselves charlatans instead of charlatans. And, uh, Susan really likes that name. Uh, also, uh, Ash villains. That's another one. That's up in Asheville who, yeah, they've, they've got some problems up there too. Um, yeah. So we've got, uh, as I mentioned the last hour breaking Brett Jensen from WBT put out, um, uh, what seems to be an email that was sent by the newly elected chair of the school board, Liz Monterey Duvall, telling her fellow board members that she doesn't feel safe and she's gotten threats, and so she's going to step aside as vice chair. She was just elected on Tuesday, and she's stepping down as vice chair, but apparently was talked into sticking around in that post until December. But she's going to stay on the board because that's not apparently– That's not the source of the threats. It's just that she being the vice chair that has garnered her the threats or something. So, um, and then we had, um, in the last segment there, the news that the chief of strategic communications, Steven Esposito, uh, was arrested last night, uh, on a DUI. So there's that as well. Uh, also, um, When you've lost the Charlotte Observer, you are in some trouble. And the Charlotte Observer newspaper and one of their deputy editorial page editors or whatever, Paige Mastin, when even she is calling you out, you know you've done poorly. Okay? So we'll get to that. The auditor is looking at the CMS books now and the contracts. It's been referred by our local DA to the State Bureau of Investigation for, well, an investigation. It's kind of part of their name. It's what they do there. So SBI now looking into two different governing agencies in Charlotte. CMS and the sheriff or the sheriff. Gary, not my fault, McFadden. From the text line, John said, when I moved back to the area with school-aged children, we didn't even look at. Charlotte for their schools. And Beth's favorite Russ says, my brother-in-law's former employer was shifting a lot of jobs from another location to our area, and they sent out advice to the relocating employees to not live in Mecklenburg, but to look at surrounding communities. If they did decide they wanted to live in the county, they should budget for private school. I don't know if this is the same company. I don't think it is. Sounds like a different one. But I remember being told a story by a local elected official back in the mid 2000s that there was a big corporate relocation announcement and everybody was super excited about it. And then, you know, they cut the ribbon with the ridiculously large scissors and all of that stuff. And the company said, forgot to tell the employees that were relocating, they forgot to tell them, hey, you want to go outside the county, if you're looking at the schools and stuff, go outside the county, or if you're going to be in the county, here are the areas where you want to relocate to where the best schools are, so your kids will be assigned to these schools, right? They forgot to send that out. And the workers who had relocated from outside of the state and came here, they were so upset at the local assignments for their students that the employer paid the tuition for private schools for their relocated employees. These are the things that the private sector does in order to minimize the harms of the public sector. The things that your public servants do to the citizens of the county. This is the way that the private sector has to mitigate the harms that the public servants are doing to the citizens. Shane says, Pete, y'all got to fix this. York County can't take any more refugees. Oh, don't even know. No, don't even say I was down in York County, uh, about three weeks ago. I was driving out, uh, down towards the, uh, Catawba Indian nation reservation out there. And I saw a lot of empty land. All right. So don't tell me that you guys can't, you can't welcome us refugees. Um, Todd says, when clowns are elected to govern, you get a circus. Watch next year. They ask for an increase in their budget for the teachers or for the children. Yes, everything is for the children. Until people realize you get what you vote in, all that will be done is the money will go to a new circus car so the clowns can keep coming out. Flapjack Brian offers up the hashtag. CMS, C-M-E-S-S, CMS. CMS. Yes. CMS at CMS. Oh, we could do a jingle. Remember the old, uh, see the U or I guess it's now they're using it again. See the USA in your Chevrolet, you know, that thing. See a mess at your CMS. Yeah. Somebody could do something. AI. Can I get a data center to give me a jingle? Somebody work on that. Um, Skippy says Belmont is full of people who left Charlotte along with Union County, Lincoln County and York County. Indeed. Indeed. Um, Corey says, uh, between the CMS board imploding. Now they're comms chief getting arrested for DWI. I'm afraid to ask what else does Charlotte plan on throwing at you before you can finally get that good. One coming on? I don't, I don't know. It's like drinking from a fire hose, my friend. Um, Lee, just an idea. Why not let school teachers only vote for the full, I mean, school board, not the full board. Only let teachers vote for school board. I don't think you're going to get a better outcome. Actually, I think you'd get worse outcomes there. Pete, we're just going to have to up the salary to 500,000 a year to attract the best and brightest, of course. So here you go. This is, So I keep saying this, this is not new for CMS. Literally my entire time here. Okay. When I was a reporter covering Charlotte Mecklenburg schools, there was always something like this going on. You have, you had a superintendent. I mentioned this early the other day that had to be physically restrained before he could climb over a desk and pummel a school board member. You had another school board member who's actually now on another body who was accused by a female school board member of threatening and intimidating her in, I think, the parking deck or something. They went into a closed session. CMS went into a closed session in order to chastise one of their fellow board members, and they called it personnel matter. That's not what a closed session was for. They also went into a closed session in order to give the superintendent a pay raise because they said, if we don't do this, then he's going to leave. So it's a personnel matter. They, on another occasion, I was told that. They had this discussion about a, about the pay for, was it, was it the superintendent or was it? Yeah, it was. I think it was a superintendent because at the time, Harry Jones, the county manager had become the highest paid, uh, manager in Charlotte, right? So he was making more money as the County manager than the city manager was and the superintendent. And so they go into closed session and they give their superintendent to pay raise because they said, well, his is the most important job for the children. So they threw a bunch of money at him. So he'd be, he'd make more than the County manager. There was another debate over the, over construction and, uh, they used to build all of the schools out of brick, full brick, right? Well, you don't have to build them out of full brick anymore because now they could just do half brick on the outside and it looks like full brick, but it's not full brick and it's cheaper. And so when they got the bids for the construction of these new schools and one of the schools or several of them were in these impoverished areas, they were like, the school board members were like, well, we want it full brick. And the building guide, Guy Chamberlain, he was like, no, you don't need full brick. You could do half brick and it's cheaper. And they're like, well, if that other school in the white neighborhood got full brick, then we should get full brick. Like, these are the things that these people have been doing for literally 30 years. Okay, this is not new for the children. All right, for over a year now, you've heard me talking about Create-A-Video, great local company in Mint Hill that has helped more than 2 million families preserve their memories by turning old photos, VHS tapes, film reels, and slides into lasting keepsakes. Now, Create-A-Video is helping families and groups... create brand new memories while they're traveling. Introducing group travel videos, perfect for family reunions, church mission trips, group vacations, destination weddings, student trips, senior adult groups, sports teams. I mean, really any gathering of people that you care about that's traveling together. 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Group travel videos from old memories to new adventures, preserving life's moments for a lifetime. All righty. Let me go back to the texts here. Mike says, Pete, if as requested, you work the words chamber pot into your presentation, please shout Garty Lou into the mic. Before doing so, as it was customary in Old Edenburg to warn passers-by before casting the contents of chamber pots from upper-story residences onto the streets below. Gosh, I wonder why they were so sick back then. Anyway, it's the civilized thing to do. Gardilu means beware of water. Thank you. Okay. Is it really water, though? I feel like it's not water. I mean, it is, okay, yes, it is oftentimes a liquid that is predominantly water, but I feel like it should be something other than, like, beware of water. Like, maybe beware of poop, you know? Like, that's really, because if it's just water you're throwing out, that's not that big of a deal. Anyway, Debra says, Union County School District is number one in the state for schools. People should move down there. Um, yes, I think union County, I think the word is out on union County. That's why it's now like the biggest Republican County, the massive turnout, like that is the Republic. That's like Republican ground zero right there. Because a lot of the people from Mecklenburg moved into union County. And that started 20 years ago. David says, I moved to Asheboro six years ago. Charlotte's a great place to be from and visit on occasion. Yes. Uh, I have said this about, uh, where I was born as well, New York. It's nice to visit. I do not want to live there. Um, the Charlotte observer, um, reporting on the North Carolina state auditor's office held a play. They held a press conference on, I believe Wednesday. Yeah. Wednesday. Um, And the office, the auditor, is pledging to get to the bottom of the alleged financial irregularities within Charlotte-Mecklenburg schools as it confirms another investigation into the troubled school district. Auditor Dave Bullock confirmed the investigation during a news conference where he said that he had met with some district staff less than 24 hours after the board fired Superintendent Crystal Hill. Stephanie Sneed also resigned as board chair on Tuesday. Bullock said, quote, we're going to get to the bottom of financial irregularities and move forward with data-driven answers. His announcement came a couple days after Mecklenburg County DA Spencer Merriweather announced that he had asked the State Bureau of Investigations to launch a formal criminal investigation after previously asking the SBI to conduct an informal inquiry into reports of alleged financial irregularities within transactions involving CMS. Okay, so they They apparently did an informal inquiry and whatever they found in the informal inquiry was enough for Merriweather to then say, yeah, go ahead and do a full-blown criminal investigation. That's what it sounds like. The auditor told reporters his office began looking into the district about three weeks ago after an interview with the Pete Callender show. No, I'm kidding. They don't say that. But I feel like I was the whistleblower here. Because I happen to have had booked Dave Bullock on the show. And the day before is when all of this stuff started coming out. And so I said, hey, you know, not for nothing. I booked you to talk about some other stuff. But while I got you and I know, you know, the auditor's office, they have a tip line, an anonymous tip line where you can report issues that need to be examined, that sort of thing. And so I said, so consider this my anonymous tip to you, even though it's, you know, not anonymous and it's on the radio live. But I did relay to him the stuff that was going on. But he said at the time when I when I when I asked him, like, are you aware what's going on with the CMS stuff, whatever? He's like, oh, yeah, we're aware of it. So they they they've been they've been looking at this for a while. They've already received a, quote, large tranche of data. from CMS. He said, quote, since we were already engaged, we felt that it was really important to come down, meet with some people in the finance department, and let them know that we were prepared to help calm the chaos. He said, everything's on the table to take a look at. The auditor's office investigation will be released as quickly as possible, he said, and will include a detailed analysis of the issues that our team discovers. In addition to releasing audit reports, Bullock noted his office has the authority to refer any criminal activity that it may uncover to the SBI and that the auditor's office is, quote, actively coordinating with the SBI within the standards of our office. So things are going quite well at CMS. On the Twitter machine, Cindy says, where are the Charlotte Center City partners in all of this? They're supposed to represent business leaders. They know that the reputation of your schools is what draws business and homebuyers to your city, but they are silent. Well, they are publicly silent. We don't know what's going on, you know, behind closed doors here. So again, and I'm not saying that there, there are discussions or there's any pressure being brought to bear or, or what kind of leverage they may have. I don't know. I'm just saying, I don't know. So they could be, Maybe not, but maybe. Okay. Another piece of the Charlotte Observer. This is why I say when you've lost the Observer, when they're coming at you like this, you know you're in some trouble. Charlotte City Council members say that the city will not distribute a grant to Charlotte-Mecklenburg schools until they have a clear understanding of how the district would spend it. This city grant, it's a million dollars. And it's caught in the middle of a swirling controversy involving an employee complaint about payments that the district made to a subcontractor without a formal contract and without CMS's board making a decision to fire Superintendent Crystal Hill after she raised questions and authored a memo accusing the board of extortion. The Mecklenburg County DA made a criminal referral into financial irregularities. at CMS over to the North Carolina State Bureau of Investigations, the SBI. Charlotte budgeted $ 1 million to help fund the school district's affordable housing teacher village. Okay. They did this last year, a $ 1 million grant to build teacher and workforce housing over at Garinger High School. The city, though, still has not executed the grant agreement or dispersed any of the money. Just the timeline hasn't... It hasn't gotten to that point where they would release the funds. But now... Now they're not so sure they want. To release the funds because the $ 1 million grant money was identified in the emails that Crystal Hill published. That this is where they were going to get the money to pay for the consultant contract that was buried in a contract with a law... firm, neither of which was run through the Board of Ed, but was instead effectuated by the board chair through the CMS finance department. And that tripped the red flags. That's when Crystal Hill found out about it and then put out the memo, blew the whistle on all of this. She got fired. Every piece of evidence that keeps coming out about this further confirms in my mind that she was being made the scapegoat here. And what she has done is actually a service to the residents of Mecklenburg County. Like, They were talking at the board meeting about how Stephanie Sneed, the board chair, and she stepped down as chair and what a sacrifice she has made for the children and all of this. Yeah, she stepped down from her position as chair. She's still on the board. Crystal Hill, she gave up her job because she had to have known what was going to happen, right? She had already been put on suspensions. And when she came back on, she then got all this information, dumped it all in the memo, had to have known where this was going. CMS leadership in emails suggested that the district use this city grant to cover controversial vendor payments to the concern of multiple city council members. Later in the piece by Nick Sullivan at the Charlotte Observer, very good piece, by the way, that Sullivan wrote here. A human resources complaint that was filed on August 21st, later obtained by the Charlotte Observer, alleged then board chair Stephanie Sneed insisted the district make monthly payments of $ 30, 000 to a consulting firm working on the housing initiative without an official contract and despite warnings that the payments violated board policy. When Hill questioned Sneed about the payments in an email thread obtained by the Observer, Sneed said CMS could use the city grant to cover these expenses. The CMS board signed the grant agreement earlier this month, but the city of Charlotte has yet to sign the agreement. Once approved, the funding would be dispersed up front and For pre-development costs, including architectural design, civil engineering services, legal fees, development services, and other consulting services. $ 30, 000 a month that would be funneled through this guy's company, Racky McGregor's company, called Quonnect or something. It's spelled with a Q, but no U. Q-O-N-N-E-C-T. Connect? Whatever. Connect? Yeah. Yeah. 30 grand a month. What are you doing? What expertise could you possibly have in affordable housing building to act as a consultant to warrant 30 grand a month? The district launched. its At Home in CMS initiative in 2024 to make housing costs more affordable for teachers through rental discounts, as well as pathways to homeownership, as well as financial literacy resources. The city pledged the $ 1 million grant to support that mission. The school board voted in May to set aside seven acres next to Garinger High School to be developed for up to 138 apartments for educators. Innovative Housing Solutions Foundation, a local nonprofit developer, partnered with the district to design, construct, and manage the housing community. CMS entered into a contract with a law firm, Pointer Spruill, in February for legal services related to the housing project. Pointer Spruill's attorney, one of the attorneys at that law firm, Katie Cornetto, sent a letter to Sneed that added additional details that were not in the approved contract. CMS would be billed against a $ 60, 000 retainer for the work in the first month, which included a $ 30, 000 monthly consultant fee to Connect LLC, the consulting firm owned by Racky McGregor. Racky McGregor had served as the CMS chief executive in residence, which I'm not even sure what that is about. Public records show CMS made monthly $ 30, 000 payments to McGregor's company from April 10th through August 4th. And then when Hill, when Crystal Hill, the superintendent, said we're not renewing this contract, all of a sudden they found another way to keep the money flowing to McGregor. McGregor resigned. As the Transportation Committee Chair for the Black Political Caucus on Sunday, according to WBTV. Huh. Why would he do that? Why would you resign as the Committee Chair for the Transportation Committee at the Black Political Caucus? Why? That's interesting timing. Do you know something was coming? Of course he did. They were trying to oust Stephanie Sneed, the board chair. And I'm sure she would have told him, hey, we're going to fire the superintendent as well. Like, be aware, people batting down the hatches. There's a poop storm coming. Oscar says, where are all these investigative journalists we're always hearing about? Actually, the local press is swarming all over this stuff now. There are a lot of reporters, I think, that are doing a very good job in trying to get to the bottom of this. It's tough. It's difficult. You're going to burn bridges as reporters. And that's hard to do, you know? You're looking into this stuff and you're going to anger people in the political establishment here. It's all basically one party. And if you alienate that party, you're not going to get as many leads and that sort of stuff as you otherwise might. So. I mean, you know, that's part of the deal, though. And so you're going to end up alienating some of these people. Then you're going to have to build new relationships to try to get at these stories like this. But the thing about this story is that this is really a follow the money story. And so you're going to have a lot of documentation to go chase down. that will make the case, that will provide the evidence. You've got the SBI and you've got the auditor looking into it. So there are a lot of different pathways here for this stuff to get exposed. I do think there are a lot of reporters that are doing a good job on this. For example, over at the Charlotte Ledger, CMS board member Anna London said in an interview that the board did not vote on hiring that law firm that appears to be at the center of the investigation into CMS contracting and finances. She made her comments on the R and D in the NC podcast, which is hosted by Tark Bakari and Larkin Eggleston, two former Charlotte city council members, Bakari, a Republican Eggleston, a Democrat and Anna London sat for an interview with them on their show. And she, She said that she and most of the school board were not involved in the decision to hire the law firm Pointer Spruill, which in turn subcontracted with the consultant, Racky McGregor. McGregor is an ally of now former school board chair, Stephanie Sneed, and was previously CMS's quote unquote executive in residence. Now, Maybe I will go back and try to figure out, like, how did this guy get this position? I've never heard of this position. Now, maybe there was somebody in it before him or whatever, but it almost sounds like he got put into the cabinet of the superintendent in order to have somebody that's an ally of the chair involved in the day-to-day management of the school district. in order to be her eyes and ears inside the superintendent's office. You know? That's what it sounds like. I don't know that. I want to be clear. But I'm just asking questions. But I see that as a potential way to do that. If you've got this management and you're the chair, but you want sort of a back channel, well, this would be a way to do it. Former Superintendent Crystal Hill said in the memo last week that she did not know why Pointer Spruill was hired or about the arrangement with McGregor through that law firm. If a majority of the board and the superintendent did not know about the hiring of the law firm or McGregor, it raises questions about their contracting procedures and whether there are enough guardrails in place to prevent conflicts of interest. Yeah, no, is the answer to that. Obviously not. CMS records released last week show Sneed, the CMS acting general counsel and its chief financial officer had signed a contract with the law firm back in February over this teacher housing project. London said, quote, I did not vote on this. We did not vote on these contracts. She said she did not know this spring that McGregor had been hired by the firm. She said it was not disclosed to the board. McGregor was the former chair of the board of Charlotte works, a workforce development nonprofit of which Anna London is executive director. McGregor was on that board when the contracts were signed, but he is no longer on that board. What have I, what have I described this as right? When you have a government like we have in Mecklenburg County now where the school has a school district has a $ 2 billion budget. County has like a similarly sized budget. The city has a similarly sized budget. But you have billions of dollars now. It's the whale. And all these little agencies and nonprofits and such, they're like the pilot fish that swim along the side of the fat whale and they just feast on the debris, on the little scraps all around the whales. And then there was this. And this, I had not gone back to check this, so I'm glad the Charlotte Ledger did this. In a summary that they were, that Charlita Hatch, school board member, was reading at the meeting, she talked about the total cost of the investigation, $ 379, 000. And she said that that represents 0.02% of the district's $ 2 billion total budget. And then Liz Monterey Duvall, the vice chair who now says she's going to step down as the vice chair due to all of the threats, you know, she corrected her saying, no, no, no, it's 0.0002. However, if you math this correctly, it is in fact 0.02 because to determine a percentage, you divide 379 grand into 2.1 billion. But because it's a percentage, you then have to multiply it by 100. And that is a step that the summary's author seems to have neglected. And so it came out as. 0002, but no, it's actually. 02. And by the way, just for the record, state education standards say that percentages are supposed to be taught to you in sixth grade. All right, that'll do it for this episode. Thank you so much for listening. I could not do the show without your support and the support of the businesses that advertise on the podcast. So if you'd like, please support them, too, and tell them you heard it here. You can also become a patron at my Patreon page or go to ThePeteCalenderShow.com. Again, thank you so much for listening, and don't break anything while I'm gone.