Two companies won lucrative contracts with Stevenson High School District 125 after the school official negotiating with them sought contributions from both to help bankroll the district’s tax referendum campaign.
The companies–Pepsi-Cola General Bottlers and Laidlaw Transit –gave $25,000 each to the campaign, donations that have drawn criticism and raised legal concerns from election law attorneys, watchdog groups and district residents.
The $25,000 that the Rolling Meadows-based beverage company gave in December to the referendum committee came from a $60,000 payment Pepsi agreed to give Stevenson for its student activity fund, according to officials with Pepsi and the school district.
The school district asked Pepsi to send the $25,000 to the campaign fund for the March 19 tax-increase referendum proposal, school and Pepsi officials said.
By channeling money meant to fund the prom and other student activities to the referendum committee, the district may have violated state campaign laws that prohibit giving public funds to a political organization or to promote a campaign, Barbara Goodman, a Northbrook election law attorney, said Thursday.
“If a document in the contract says `We, Pepsi, are going to give $60,000 to go back to the school’ and only $35,000 made it, that’s wrong,” said Goodman.
Stevenson officials said Thursday they did nothing wrong and said they believe the district’s dealings with Pepsi, Laidlaw and the campaign committee were completely legal.
“If [the contracts] were let to the lowest responsible bidder, I don’t have a problem with it,” said Supt. Rick DuFour, who has been with the district since 1983 and is retiring this year. “There was no quid pro quo.”
School board president Lester Raff also said Thursday that he did not see a problem with the arrangement and said he believes it was legal to ask the beverage company to send the $25,000 to the campaign committee.
After defending Jim Hintz, the assistant superintendent for business who negotiated the contracts and asked for the donations, DuFour said late Thursday that “in retrospect I would prefer [the fundraising] would not be done on school time.”
In many other school districts, referendum committees prohibit school officials from raising funds to avoid the appearance of putting pressure on vendors.
Even though the district believes it broke no laws, DuFour said he will take the matter to the Illinois State Board of Elections for review. He said he would ask that the campaign committee return the $25,000 to the school if the Election Board determined the donation was illegal.
Rupert Borgsmiller, director of campaign disclosure with the state board, said a review can take months. State law defining “public funds” is not always clear, he said.
“There’s not something that is black-and-white on it” in the law, he said.
Terrance Norton, executive director of the Better Government Association, a watchdog group in Chicago, said what Hintz did “looks to me as if power is being used–economic power–in a way that shouldn’t be used by our public officials.”
Dan Dowd, who lives in Long Grove and opposes the district’s tax request, said Hintz’s actions “look like an abuse of his position. … If this doesn’t violate the law, it ought to.”
The school district in Lincolnshire, named for former Illinois Gov. Adlai E. Stevenson, is one of the wealthiest in the state. About 4,200 students attend its one high school.
The district is asking voters for an education property tax rate increase of 43 cents per $100 of assessed valuation, an increase that would cost the owner of a home with a $300,000 market value $415 more per year in taxes, according to projections.
The district would offset the increase by dropping its bond rate an equal amount.
The district decided to put the tax request on the ballot early last year and began work on the campaign last summer.
At that time Hintz was negotiating with Pepsi and Coca-Cola Bottling Co. of Chicago, he said. Coke had held the contract for the previous decade. Both companies wanted to win the district’s five-year beverage contract worth up to $250,000 a year, said Hintz, who has been with the district since 1980.
Hintz said he was also preparing bid specifications for the district’s $1.5 million busing contract, which had been held by Laidlaw and related companies for the previous 20 years.
At least two other bus companies were interested in bidding, though only one company, Alltown Bus Service of Skokie, competed for the contract, he said.
Hintz said that before either contract was completed, “I may have influenced [the companies] to the point where I said, `If you’re going to give a donation to Stevenson, instead of cases and cases of T-shirts, give it to the [referendum] committee.”
Laidlaw made its contribution in October.
In January, the school board approved a five-year contract with Laidlaw after the company presented a bid about $200,000 a year lower than Alltown’s, documents show.
Hintz said he had been negotiating the beverage contract since last spring and determined that Pepsi’s offer was worth about $100,000 more to the district than Coke’s bid.
Hintz alone had authority to approve the contract, which the school board was not required to vote on.
On Nov. 28 the contract was signed, and three weeks later Pepsi sent $25,000 to the campaign committee, documents show.
The district has six other large contracts for maintenance, heating and cooling, food service, banking and financial advice, none of which were up for bid this year, Hintz said.
None of those companies was asked to donate to the referendum campaign fund, he said.
