Ex-Centinela Valley superintendent pushed through private retirement plan worth $294,000 to him, testimony reveals
Disgraced former Centinela Valley school Superintendent Jose Fernandez was “extremely” eager to secure a supplemental retirement plan for the district from which he stood to gain $294,000, according to court testimony Monday.
“JF is extremely hot on this,” then-Assistant Superintendent of Human Resources Bob Cox wrote in a September 2012 email to a school district lawyer about a program that would give longtime employees additional retirement benefits.
A portion of the redacted exchange was read aloud by a prosecutor on Monday, the sixth day of the preliminary hearing in the corruption case against Fernandez, who is accused of bilking taxpayers out of hundreds of thousands of dollars by finding ways to dramatically boost his pay and benefits leading the tiny, Lawndale-based district.
Cox, the latest former Centinela Valley Union High School District official to take the witness stand in downtown Los Angeles, said he used the terms “white hot” and “extremely hot” in emails to describe Fernandez’s sense of urgency about getting the plan approved months before a pension reform law took effect.
Prosecutors allege the supplemental retirement program was part of a scheme Fernandez devised to spike his pension, and that he failed to mention his own potential benefit when presenting it to the school board, which approved the plan in December 2012.
A judge will decide whether Fernandez should be tried on a dozen charges, including embezzlement, misappropriation of public funds and conflict of interest, which could send him to prison for as many as 15 years if he is convicted.
The supplemental retirement plan offered employees with more than 15 years of service as much as 7 percent of their pay, covered entirely by the district. It was billed as a way to save Centinela Valley money by giving veteran educators an incentive to retire early, offering an unusually long seven-year timeline for those eligible to participate.
Fernandez’s defense attorney, Vicki Podberesky, said the idea was to get more district veterans on board.
“Essentially, the longer the time period of the program, the more employees could participate,” she said.
Cox, a former sportswriter for the Daily Breeze who succeeded Fernandez as superintendent but is now retired, said he understood that Fernandez would become eligible just before the seven years were up.
At the time, it caught the attention of Public Agency Retirement Services — or PARS — the private company that offers the plans. Senior Vice President Eric O’Leary emailed Fernandez noting the potential for a conflict of interest, or at least the perception of one.
Fernandez was unable to collect the benefits because he was fired before he turned 55.
Deputy District Attorney Stefan Mrakich also spent time questioning the superintendent’s hiring practices. Cox said it was normal for Fernandez to skirt the district’s protocols and not seek his input even though he was in charge of human resources.
“I think it shows an overall pattern on Mr. Fernandez’s part where he’s in control,” Mrakich said.
The day also featured testimony from current Centinela Valley school board member Hugo Rojas, who was elected in November 2009 and voted weeks later to approve the controversial employment contract at the center of Fernandez’s case.
Unlike two former board members who testified that they were initially unaware of a provision in the contract giving Fernandez the option to obtain a nearly $1 million, low-interest home loan, Rojas said the trustees did discuss it prior to casting their votes.
But Rojas said he didn’t find out that Fernandez had executed the loan to buy his two-story Ladera Heights home until he read about it in the Daily Breeze in February 2014.
He said he didn’t remember seeing a copy of a $910,000 check to a Santa Monica escrow company that prosecutors allege was a “surreptitiously” included in several pages of financial records under a consent calendar of routine board agenda items.
Rojas said he confronted Fernandez about the “disturbing” revelations in the Daily Breeze. The superintendent replied that the newspaper’s reporting was inaccurate, Rojas said, and he was told, “Don’t worry about it, legal is going to work it out.”
With a long witness list, tedious questioning and a case file with thousands of pages of documents, the preliminary hearing is taking longer than expected and may have to resume in March.
Assistant Superintendent of Business Services Ron Hacker is expected to testify on Tuesday.