By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
District employees and school board members used school district credit cards for personal expenses. The district credit card balance ballooned to more than $20,000 despite a state law that forbids school districts from incurring credit card interest.
The district purchased expensive vehicles including a new Ford Excursion for Alvin Barlow and a $38,000 Ford F350 truck for Jeffrey Jessop. The district paid for oil, gas and maintenance of more than a dozen vehicles given to district employees to use for personal as well as district business.
District employees traveled excessively, often taking family members along on trips that were paid for by district funds. The district purchased the Cessna airplane to facilitate travel and entered into a contract with the school board president's son to fly the plane.
The district had more than 100 employees for 300 students, far more employees than any other school district its size. The unusually high number of employees was a way to transfer public school funds to FLDS members, who were then required to make significant contributions to the church.
The district paid FLDS members hired to drive buses and work as custodians far more money than certified schoolteachers who were members of the despised Centennial Park polygamous sect.
The district transferred three public school buildings to an FLDS-controlled entity at a loss to the district of more than $330,000. The former public school buildings were converted into FLDS schools.
Three months after the New Times April 2003 exposé, state Superintendent of Public Instruction Horne asked the state Auditor General to conduct a special audit of the Colorado City school district to review its finances. The state audit would drag on for more than two years, but its release late last month would prove to be a major blow to the school district.
Excessive spending by the Colorado City school district came to a head when teachers' paychecks started bouncing in October 2004. The district had maxed out a $1 million line of credit with Wells Fargo Bank and was issuing bad checks. Teachers were outraged, but continued to show up for work despite the lack of pay.
State education officials were powerless to intervene as the district plunged ever deeper into debt. There was no law allowing the state Department of Education to forcibly remove a corrupt and/or incompetent public school administration and school board from power -- even if they effectively bankrupt a school district.
"Nothing can be done until I get authority to do something," Horne said in November 2004. "I should already have that authority, but I don't."
Horne and Attorney General Goddard each introduced legislation in January 2005 to address the situation. After several months of contentious hearings, the Legislature passed a bill last April allowing the AG to petition the state education board to take over financially failing school districts. Governor Janet Napolitano signed the bill on May 9.
Ten days later, Mohave County school superintendent Mike File and two state legislators conducted a surprise visit to the Colorado City school district. File met with teachers and staff and warned that significant changes were about to take place at the school district, including the dismissal of unnecessary and corrupt employees.
The unscheduled visit infuriated Colorado City school officials.
"It was one of those things they didn't have any idea I was coming, and they were pissed," File says. "I just told it how it was."
News of File's tumultuous visit to Colorado City quickly got back to the AG's Office, which contacted File the next day.
File said Goddard's attorneys wanted to know if File thought Colorado City school officials would destroy public records to prevent a receiver from being appointed to run the district's finances.
"I said, 'They already are,'" File says he told the AG.
Four days later, on May 23, more than 20 police officers and AG investigators raided the Colorado City school district's office and filled a large moving van with boxes, computers and file cabinets. Search warrants indicated that Alvin Barlow, Jeffrey Jessop and assistant business manager Oliver Barlow were under criminal investigation for misuse of public funds.
The raid generated a huge treasure trove of documents for the AG, some of which were used to help prepare the AG's petition to place the school district into receivership. Goddard began legal action against the Colorado City school district on August 12, the day the new school receivership law took effect. The AG says he was prepared to present more than 20 witnesses and 175 exhibits at a hearing before the state Board of Education scheduled for December 8 and 9.
But that hearing was canceled after the consent decree was signed.
The three Colorado City school officials signed the consent decree on November 23, two days after the state Auditor General released the findings of a long-awaited audit requested in July 2003 by Horne.
The Auditor General's report was sharply critical of the school district's financial operations. The Auditor General noted that the private firm auditing the Colorado City school district's finances had "expressed substantial doubt about the District's ability to continue its operations."
The consent decree allows Alvin Barlow and Jessop to avoid appearing before the state Board of Education hearing and being asked to give sworn testimony on matters in which they are targets of a criminal investigation. The men indicated in pleadings that they would invoke their Fifth Amendment right against self-incrimination if called to testify.