Feds: Detroit School Principals Involved in Lucrative Kickback Scheme
Twelve principals, one administrator and a vendor were hit with corruption charges in Detroit after it was revealed that they stole over $900,000 in a kickback scheme.
Norman Shy, the vendor for school supplies, would allegedly give out fake invoices to schools and the principals would approve them, despite not receiving the supplies. Shy made $2.7 million through his operation, and dished out $908,500 in kickbacks and bribes to the principals.
The charges were announced at a press conference Tuesday.
"A case like this is a real punch in the gut for those who are trying to do the right thing," said Barbara McQuade, U.S. Attorney for the Eastern District of Michigan.
The revelations come shortly after local calls for a crackdown on school corruption and during a massive Detroit Public School financial crisis. As Casey Quinlan points out at Think Progress:
In January, school district officials warned of the possibility of bankruptcy in April. In February, DPS had to begin payments of $26 million each month to service over $260 million in loans that have kept the schools open. On Tuesday, Michigan Gov. Rick Snyder signed legislation providing $48.7 million in emergency funding to keep the school system going through the end of the school year. Snyder also signed legislation that brings the school system under the authority of the Michigan Financial Review Commission. The governor is pushing a bill that is considered a longer term fix to the problem that would restructure the school district in order to pay off its debt over many years.
Read a more detailed breakdown of the charges at Detroit Free Press.