Hempstead school district sues consulting firm
Hempstead school board members, at a Dec. 6 meeting, are, from left, David Gates, Randy Stith, Patricia Spleen, Vice President Carmen Ayala and President LaMont Johnson. Credit: Danielle Silverman
The Hempstead school district is suing the now-defunct New American Initiative in an attempt to recover nearly $186,000 it paid the Brooklyn-based education consulting firm, saying NAI “defrauded” the district by billing for work that wasn't performed and other practices.
The complaint against NAI and its chief executive officer, Lorraine Scorsone, alleges the firm inflated pricing, offered training that had no value, padded bills and “schemed” with third parties, allowing some of its former staff members to be hired by the district through a “rigged” process. The lawsuit was filed Dec. 28 in state Supreme Court in Mineola.
Hempstead Superintendent Shimon Waronker, whom the school board placed on paid administrative leave nearly a year ago, was a founder of the consulting firm in 2013. Waronker, hired as schools chief as part of an effort to turn around the struggling 8,000-plus student district, brought in the agency shortly after he started work in Hempstead in June 2017.
The school board approved a $450,000 contract with NAI that began in July 2017.
The district "examined over 25,000 pages of NAI’s emails, documents, billing, services that were claimed to be performed by the NAI, and internal communications regarding the NAI’s operations. The District found significant discrepancies, inconsistencies and questionable items in the paperwork, and has determined that pursuing litigation is warranted to recover the money paid to the NAI,” Jonathan Scher, the Carle Place-based attorney for the district, said in an emailed statement. "The District is not claiming breach of contract, but rather is claiming that it was duped."
A spokeswoman for the board and district declined to comment on the litigation.
Scorsone and representatives from New American Initiative could not be reached for comment. The firm dissolved Dec. 18, according to New York State Department of State records.
Hempstead schools Superintendent Shimon Waronker is shown at a special school board meeting on Jan. 9, 2018, when the school board voted 3-2 to place him on paid administrative leave. Credit: Danielle Finkelstein
The school system's lawsuit seeks in total more than $2 million in compensatory and punitive damages, interest and attorneys’ fees. Scher said the district hopes to recover the funds from those responsible for the firm or its insurance company. The name of the insurance company was not immediately available.
Waronker is not named as a defendant in the lawsuit. His contract allowed him to recommend that the district enter into transactions with NAI and certain other organizations with which he had professional or financial relationships as long as he did not draw any compensation from them.
Frederick K. Brewington, the Hempstead-based lawyer representing Waronker, said Wednesday he was reviewing the lawsuit.
Waronker founded NAI in collaboration with other doctoral students from Harvard University's Urban Superintendents Program to provide innovative support to schools, according to its website, which has been taken down.
Seen as a reformer who had turned around low-performing and violent schools in New York City, Waronker began work in the Hempstead district on June 2, 2017, under a four-year contract paying $265,000 annually in base salary, plus benefits.
Scorsone became CEO of NAI on June 15, 2017, according to the complaint. It alleges she was not qualified to hold the position.
The district hired NAI on June 27, 2017, and entered into a contract with the firm on July 25, 2017, according to the complaint. The services it was expected to provide included training, hiring practices, contract negotiations and media relations. The time frame of the contract was not specified in the lawsuit.
At that time, the firm “was suffering a negative cash flow and was on the verge of suspending its operations,” according to the lawsuit.
Waronker “breached his fiduciary duty” to the district by drafting its contract with the firm and pressuring district business officials to expedite payments without anyone reviewing whether the services billed were actually performed, according to the court papers. The lawsuit says the firm aided and abetted that alleged breach.
In fall 2017, relations between Waronker and some members of the school board soured, with some trustees criticizing him for awarding the contract and for hiring former NAI staffers. The district suspended the firm's services on Dec. 21, 2017.
On Jan. 9, 2018, the five-member board, after a shift in its majority, placed Waronker on paid leave, and on Jan. 13, 2018, terminated its contract with the firm. Regina Armstrong, a longtime administrator in Hempstead, was appointed acting superintendent.
The district in its complaint is seeking $185,636 in compensatory damages from NAI for work it says was not performed and $1,865,364 in punitive damages. Amounts for interest and attorneys' fees were not specified; the system is seeking not less than $2 million overall.
The lawsuit is “separate and distinct” from actions the district has taken to address Waronker’s employment contract, Scher said.
The school board, in an internal labor action, in August filed charges against Waronker seeking his removal, accusing him of bid-rigging, conflict of interest, sham hiring, neglect of duty and misconduct. Under his contract, Waronker is entitled to a hearing, but no date has been set.
Brewington has called those allegations “false and contrived to mask the real issues that Dr. Waronker was in the process of helping the district solve.”
Some of those accusations are being reviewed by the Nassau County district attorney’s office, officials have said.
Waronker on Jan. 19, 2018, filed a lawsuit in federal court in Central Islip against the district, challenging the board’s vote placing him on leave. That lawsuit is ongoing.
