CPS audits furniture purchases for possible fraud

November 23, 2011 (CHICAGO)

After months of investigating, the ABC7 I-Team has found evidence suggesting the schools may have been billed for more expensive furniture than they ordered or received.

"The desk job" has triggered an across-the-board CPS audit of all furniture contracts and may have resulted in one top resignation.

"I've contacted the Inspector General for the Chicago Public Schools. I've requested meetings with purchasing, the law department at Chicago Public Schools..." contractor Scott Mills said.

When Mills and his business partner couldn't get the attention of public officials, they came to the I-Team.

Mills and Dave Tatge are owners of an elementary school furniture dealership and have held contracts with the CPS for the past 16 years.

They say when furniture from a competing firm also began arriving at city schools, they saw it wasn't up to contract specifications.

"We are trying to get somebody to dig a little deeper into this and see if others find the same conclusions," Tatge said.

After obtaining CPS's furniture contracts and bids through the Freedom of Information Act, the I-Team started an investigation at Clemente High School and the new South Shore High School.

The Frank Cooney Company is the supplier that furnished those schools and has supplied CPS with the majority of its new furniture since 2008. The company is headquartered in Elk Grove Village and has been run by Kevin Cooney for more than 20 years.

According to CPS' contract, Cooney was to furnish the schools with these custom-designed computer tables from a manufacturer called KI.

"No it is not our furniture," said Dave Fairburn of KI Manufacturing

But KI's national sales manager said the computer tables that Cooney supplied are nothing like his company's, which completely encase all wiring.

"Our table, as specified, meets the Chicago Electrical Code in the entire table system is UL approved," Fairburn said. "This is a key component, working with the architectural firm back in 2007, to ensure safety and ensure that code compliance was met."

Instead of a state-of-the-art, pre-wired and ready-to-go computer table from KI, for which CPS appeared to pay $728 each, Cooney provided CPS with plain tables from a different manufacturer and estimated to cost half as much,tables that all had to then be wired by cps electricians.

"It's inconceivable to me how one of our suppliers could substitute a product, even with approval from the district, and then invoice us for the original product," said Tim Cawley, chief administration officer for CPS. "That is not tolerable."

The I-Team asked a licensed inspector if the substituted table even met CPS specs.

"It did not," said inspector Steve Hier.

And certified engineer Steve Hier said that means the hundreds of tables CPS received were lesser quality steel.

"It was not UL listed," Hier said. "It appeared that an electrician had installed a solid raceway there and the specs called for it to be open on both sides. The posts for the table were supposed to be 2 inches by 5 inches and they were 1 ½ inch by 3."

After first telling us this was nothing more than a squabble between "rival" contractors, cps has done a 180 and begun a full audit of all furniture contracts.

And now, the top CPS administrator who signed off on contract changes has stepped down. Her resignation, according to school officials, coincided with the I-Team investigation,

"She resigned because people began to ask questions about some of the decisions that were made, " Cawley said.

CPS's Office of the Inspector General has also opened an investigation based on the I-Team's findings.

"I would say its potentially fraudulent and that is why the inspector general is looking into it," Cawley said.

The I-Team asked Kevin Cooney to talk to us about the findings. At first, he agreed to a TV interview, then backed-out. An attorney emailed us this statement: "All furniture provided by Frank Cooney Company was approved and authorized by the Chicago Public Schools. Specifically, regarding powered computer tables, any change in specifications was initiated and approved by the Chicago Public Schools for a table of equal quality and price."

But the alleged irregularities go beyond computer tables.

At the newly opened Ogden International School, most of the furniture supplied by the Frank Cooney Company was not on the contract the I-Team obtained. One classroom is filled with imported tables and chairs made by the German company "VS" and supplied by Cooney, but the bid calls for less expensive tables and chairs from the manufacturer "Artco Bell".

The I-Team estimated the desks and chairs at this one school cost tax payers an extra $168,000.

"Everyone of these areas needs to be looked at with rigor and any supplier that's not doing their job for us needs to be fired," Cawley said.

CPS and their inspector general are not the only public agencies now looking at Cooney's furniture contracts. According to investigators familiar with the case, the Cook County State's Attorney has subpoenaed contract records of CPS furniture deals, looking into whether the Frank Cooney Company meets minority contract requirements. In1999, Kevin Cooney was found not guilty on charges he used a phony minority front to obtain Chicago school district furniture contracts.

Chicago Public Schools Website

CPS - Office of the Inspector General website

The Frank Cooney Company Website