School Board Member Stephanie Kraft Has a History of Shady Deals
The Broward County School Board is slowly coming unraveled at the seams of its own long-standing corruption. First the FBI brought down School Board member Beverly Gallagher for stuffing bribe money in a doggy bag, and now we know that Board member Stephanie Kraft, long suspected of being a tool for lobbyists and developers, has also been in their pockets.
Kraft's husband, Mitch, spent two years on the payroll of School Board lobbyist Neil Sterling and had also been paid by a controversial Coral Springs development firm, Prestige Homes, that was in negotiations with the School Board on hefty fees it must pay the board. During that time, Stephanie Kraft voted on more than $1 billion in projects related to Sterling clients and personally interceded on Prestige Home's behalf to help the firm get a $500,000 break on School Board fees.
Make no mistake, this is some of the most blatant corruption I've ever uncovered. And Kraft didn't break easily. She guarded the secrecy of those dirty deals as long as she could. And that secrecy very well could seal her fate in the ongoing federal corruption investigation that seems to be slowly consuming the entire county.
That secrecy is also likely what will seal Kraft's fate as federal agents investigate her actions. Just the existence of the deals with Kraft's husband is likely a crime, and the fact that she never disclosed the relationships publicly seems to indicate that she knew they were illegal and that the public wouldn't stand for them.
Kraft's corruption involves huge amounts of taxpayer money, but it also has impacted many lives. Take the school district's health care contract, for instance. While her husband was on Sterling's payroll, Kraft helped steer the district's lucrative health insurance contract to Vista Healthplan Inc., a Sterling client and sole provider of health insurance to School Board employees.
Kraft sat on the Superintendent's Insurance Advisory Committee and used her position to back Vista. She helped the firm get a three-year contract to provide health insurance to 41,000 school district employees. The contract was worth $1.7 billion. That averages out to about $565 million a year. Previous contracts to cover school district employees had cost about $200 million a year. The reason for the huge increase hasn't been explained.
Vista is now jacking up rates on employees' children by as much as 45 percent, a change that will take effect January 1. The huge rate increase will add hundreds of dollars each month to the bills of many shocked and dismayed employees. The committee on which Kraft sits voted unanimously to approve the increase before the full board voted to authorize it.
"Going up that much was a shock," said Broward Teachers Union President Pat Santeramo, who also sat on the Insurance Advisory Committee until recently stepping down. "Normally the committee would look at the rate increases and negotiate the price with the company. If this was the starting point for the rate increase, why wasn't it negotiated down?"
School Board employees with young children are exasperated — some of them will pay as much as $200 more a month for a single child.
"The increase in insurance is completely crazy," said Adriana Martin, a science teacher at Glades Middle School. "The rates on my 12-month-old son are going up from $402 to $600. And it's not even a very good plan. It's silly that you pay that much for insurance. I'm going to another company because it's cheaper. I've already gotten quotes in the $200 range."
So how did Vista get the contract? For several years, the School Board had offered employees a choice between Humana and Vista. But last year, district officials decided to go with Vista as sole provider after Humana attempted a 22 percent rate increase. The committee initially decided to go with Vista without even putting out bids, Santeramo says. That prompted the union to issue a letter of protest, which forced the district to open up a bidding process.
Once bids were taken and companies were chosen for the short list, each committee member produced a scorecard for each firm. The committee was made up of several district officials, a couple of union officials, and three board members, including Kraft, Bob Parks, and Robin Bartleman.
Five companies made the short list, but the committee voted Vista as number one. It was Kraft's job to rank the companies, and she led the charge for Vista. She gave Vista a whopping score of 95, versus her second-highest score of 81 for Humana. Of course, she never revealed that her husband was on Sterling's payroll at the time.
The other two board members, Parks and Bartleman, also voted Vista as number one, though by slimmer margins.
And there, every step of the way, helping to shepherd along the votes, was the Vista lobbyist, Sterling, the guy who was paying Kraft's husband.
"Neil Sterling was involved in the process," Santeramo said. "He's not just involved in the construction department. He's the common denominator. His fingers are everywhere."
Making the situation even more egregious is that the same committee, with Kraft in tow, just rolled over for Vista when it came to the rate increase on children.
"My insurance is going up at least $100 a month, and I'm one of the lucky ones, because my kids are over 4 years old," says Richard Cantlupe, a social studies teacher at Westglades Middle School. "Some of these poor teachers who have dependents under 4, the rates are just totally outrageous. It represents a major cut in pay."
Superintendent James Notter announced publicly during a School Board meeting October 6 that the district would pick up the cost of health insurance increases. That's simply not true, teachers say.
"I think what the school district is doing right now is scandalous," says Broward Teachers Union spokesman John Ristow. "[Notter] was talking about how the district is picking up the cost of premiums for individual employees, but in fact, they are diverting the cost of premium increases to employees that pay for dependent coverage. Quite literally, the cost of dependent coverage is going up an average of 40 percent. It's a crime for him to be saying at a public meeting we're doing this when in reality they are doing something completely different."
Well, there's a lot of that going on at the School Board right now, especially when it comes to Stephanie Kraft, whose husband's deals have clearly had a corrupting influence on the entire board.
Take Thomas Coates, who is executive director of the School Board's facility management department. He confirmed last week that Mitch Kraft was working for Prestige Homes as the developer put pressure on his office to reduce fees owed to the School Board for two controversial housing developments on golf courses in Tamarac.
I asked Coates, who spoke about the matter reluctantly, if it was especially difficult to negotiate with a developer when a School Board's spouse was working on the other side of the table. "You could say that, yes," he said.
Of course it is. And that's one reason state and federal law makes little distinction between the politician and his or her spouse when it comes to graft: It's all going to the same household.
A trail of records obtained from the School Board confirmed that Mitch Kraft contacted board officials on behalf of Prestige and that Stephanie Kraft herself put pressure on district staff to make sure the $500,000 favor for the developer made it onto the July 24, 2007, School Board agenda, where Kraft was party of the unanimous vote to approve it.
Prestige, however, hasn't built the development yet and hasn't paid the fees, so they have gone back up during the past two years to nearly $1.85 million. Coates wrote in a memo that Prestige Homes owner Bruce Chait complained about it during a September 29 call, saying he hired Mitch Kraft for the specific purpose of keeping the fee down. Chait also said he would complain to Gov. Charlie Crist, whom he claimed supported his project.
Compounding the sleaziness of Kraft's Prestige Homes connection is the fact that the developer is alleged to have bribed former Broward County Commissioner Josephus Eggelletion with a golf club membership in exchange for his support for the two projects. Eggelletion was charged last month in a federal corruption sweep that also netted Gallagher. No charges have been filed in the golf membership case, though sources say it is still under active investigation.
Although it's a bit surprising just how corrupt Kraft has been, she has favored special interests over taxpayers for years. She was first elected in 1998 on a promise of reform and accountable government. But it didn't take long before it was obvious she was more interested in protecting her political benefactors than the taxpayers.
The first real clue came in 2000, when she lashed out at a School Board audit that found the district had paid too much for a parcel of land purchased from developer Ron Bergeron. Kraft complained that Chief Auditor Pat Reilly's criticism of the Bergeron deal was "misleading and, frankly, borders on the fraudulent."
So why was Kraft defending Bergeron's profit? For one, Bergeron was a huge supporter of Kraft's and contributed money to her campaign and helped provide her a base of support. Bergeron had reason to back Kraft. Her campaign opponent, Don Samuels, had voted against buying the land for the bus depot (which, by the way, has turned into a huge boondoggle).
Another reason was that Bergeron's lawyer/lobbyist/girlfriend, Ali Waldman, helped run Kraft's campaign and served as her campaign treasurer.
Kraft's defense of the bad land deal led one volunteer for her campaign to question whether Kraft was corrupt. "We elected her because we trusted her," Lauderhill's Rose Leiterman said at the time. "Now I have my doubts. It makes me sad. I'm ashamed of her."
This summer, Kraft again showed her reluctance to protect taxpayers against big business interests when an audit showed that the school district had again been hornswoggled. Auditors found that taxpayers had been ripped off to the tune of $765,000 in a dubious post-Hurricane Wilma deal with AshBritt Inc. Kraft was outraged — but only at the auditors for exposing the situation.
While the School Board's building-boom frenzy continued the past few years, leading to hundreds of millions of dollars wasted and a small city's worth of empty classroom seats, Kraft backed it every step. She also voted for the district to skip conducting a state-required survey that would have shown that the construction wasn't necessary.
Kraft's relationships with Sterling and Prestige Homes are illegal, corrupt, and morally bankrupt. She should do the county a favor and resign now.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you'll never miss New Times Broward-Palm Beach's biggest stories.