Former House Majority Leader and DVUSD Board President Tom Boone masterminds largest school district SCAM in Arizona history

SWR is committed to exposing and reporting the alleged conflicts of interest and appearance of illegal activities conducted by, on behalf of or in conjunction with Tom Boone and his affiliated entities and associates.  Please return to SWR for continued articles on this matter.

Majority Leader Former Majority Leader of the Arizona House of Representatives, conservative Tom Boone (R-Peoria), has a lock on the definitions of suspicious activities and friends with benefits.

Boone rules an empire of shadowy and unregulated intergovernmental agencies (IAs) whose only revenues come from the fulfillment of “intergovernmental agreements” that sell no-bid products and services to other IAs, like the Deer Valley, Peoria and Paradise Valley Unified School Districts.  These three districts are the original founding partners in Boone’s tangled web of insider trading.

The multi-tasking State Representative, DVUSD Board President and CEO of Valley Schools Management Group (VSMG) finds ample time to line his pockets with taxpayer dollars intended for the education of local children.

As CEO of this unique web of quasi-governmental entities, Boone provides income, employment and/or backdoor access to himself, friends, family, influential district employees, past/present board members and preferred providers of goods and services.

Some of Boone’s go-to insiders are names everyone recognizes:  attorney David Cantelme, Bill Maas, and Ted Carpenter of DVUSD; Diane Douglas of Peoria USD, and CPA/lobbyist Jim DiCello of Paradise Valley USD.

Under Boone’s guidance, VSMG functions as the parent company and intermediary between his other IA schemes.  The VSMG oversight branch of Boone’s empire consults, procures, advises, researches and lobbies lawmakers, school boards and Boone’s other agencies.

Each VSMG management opportunity affords Tom Boone a revenue generating opportunity as well.

Presently, Boone’s IA empire includes Valley Schools Employee Benefits Trust (VSEBT), Valley Schools Insurance Trust liability insurance (VSIT), Valley Schools Worker’s Compensation Pool (VSWCP), and a facilities and construction branch.

The true amount of Boone’s profit remains a mystery.  District Superintendents and Governing Board members remain silent on Boone’s conflict-of-interest, even as they sign the agreements that repeatedly pay him.

The anti-trust whistleblowers have taken notice and are fighting back.

There is virtually no public discussion of Boone & Co allowed at any open meeting of any school district that is under contract to him.  Conscientious school district employees are scared into silence.  Phone calls to districts go unanswered.  Freedom of information requests are ignored by member school district public information officers and VSMG’s intergovernmental agencies.

Many watchdog parents and local citizens have tried to obtain hard copies of VSMG and district finance reports but have been met with open defiance.  Sometimes hostile.  Always angry.

DVUSD public information officer Sandi Hicks is one of the worst repeat offenders.  She has been in violation of the State’s public information law numerous times.  Hicks makes no apologies for breaking State law while intentionally withholding, losing or infinitely delaying the release of public information.

Boone’s circle of defiance and arrogance may be wearing thin.

His VSMG empire is currently being investigated by the Arizona Attorney General’s Office for refusing to release public records to the AG, district parents, and others.  The suspicious activities don’t stop there.

Mastermind Tom Boone wants to enjoy the privileges of private enterprise while paying all of his expenses with taxpayer dollars from local school districts, going so far as to keep his profits hidden from those same taxpayers.  There is no return to the taxpayers on their secret investments in Boone & Co.

That is, if there are any investments left on the balance sheets.

A routine accounting audit conducted by Heinfeld, Meech & Co. in 2007 contained the shocking disclosure that the worker’s compensation pool of the VSIT had invested 78% of total funds in Federal Mortgages, US Agencies and Treasury Notes.  The investments of the liability wing of VSIT were extremely volatile as well, with 69.4% invested in US Federal Mortgages and US Agencies.
Audit Samples 2007
These shady investments in US Mortgages total in the millions of dollars.

The Heinfeld audit chastised the Boone empire for not having any investment policy that would limit its credit risks and over exposure to fair value losses and rising interest rates.  Boone also failed to have rules that would prevent any one fund from receiving most, if not all, of any VSMG monies.

Solid financial planning skills and diversified investments were noticeably absent from the Tom Boone & Co balance sheets.

Enormous financial losses to the various Boone entities could explain VSMG’s current refusal to provide financial records to the public and the AG’s office.

Since the audit in 2007, the mortgage industry has tanked.

It is possible that millions of dollars teachers and district employees have manditorily entrusted to Boone & Co are gone and he doesn’t want anyone to know.  Millions that could save lives and keep teachers healthy while in the classroom.

The families of teachers and district employees are completely dependent on Tom Boone for their health, dental and vision insurance.  If an internal financial problem exists under VSMG, a catastrophe could occur for multitudes.

The highest profile IA under Boone is the Valley Schools Employees Benefits Trust (VSEBT) which manages and procures employee benefit plans.

Tens of millions of dollars in health, dental and vision insurance benefits for thousands of Arizona school district employees are purchased by Boone’s VSEBT and then re-sold to the cash strapped teachers and their families at a mark-up.

There are no comparisons or choices that District Boards or their employees can make.  Each District member of VSIT and VSEBT is obligated to choose from whatever health benefits that have been vetted and procured by Boone. Take it or leave it.

This lucrative and unchallenged purchasing power has prompted Tom Boone to expand his horizons.

Cashing in on the millions of dollars spent on construction projects and facilities management by all school districts, Boone has a no bids allowed answer for the VSMG school districts under his control.

A School Facilities and Construction branch of VSMG that benefits from the insider information and cooperation of DVUSD Executive Director of Fiscal Services, Jim Migliorino, and DVUSD Director of Design and Construction, Jerry Cipriano.

Tom Boone, VSMG and district insiders already have preferred construction firms for district building projects:  Core Construction at 3036 E. Greenway Rd, Progressive Roofing in Phoenix and Pueblo Mechanical of Tucson.  Each company has completed a number of projects for DVUSD and other VSMG Districts.

Boone also has a preferred utility company for his burgeoning solar energy projects in VSMG school districts:  Arizona Public Service (APS).

Ironically, Boone’s favored construction industry partners have favorite candidates in local elections.

According to the Maricopa County Recorders Office, during the 2008 election season, Core Construction donated $10,000, Progressive Roofing and Pueblo Mechanical each donated $5,000 and APS gave $4,500 to a political action committee affiliated with Tom Boone. {Source}

The PAC, called Deer Valley Support Our Schools (sic), was opened on May 28, 2008 by DVUSD’s Jerry Cipriano, and State employee Alan Richardson.

Coincidentally, during this time, Tom Boone was in the midst of his 2008 campaigns for Board President of Deer Valley Unified School District and LD-4 House Representative.

Under Arizona law, the construction firms could not contribute more than a pittance to Tom Boone’s election as a State Representative in Peoria’s LD-4.  Boone chose to run his legislative campaign with public money from the Citizen’s Clean Elections Commission, which prevented him from receiving $24,500 in contributions from four of his favorite firms.

Boone’s affiliated political action committee was the perfect substitute recipient of this dirty money.

Core Construction, Progressive Roofing, Pueblo Mechanical and APS made their $24,500 worth of contributions two months before Boone’s successful Primary election in September.

As the 2010 election season is just around the corner, Boone’s political aspirations seem to be in jeopardy.  At a minimum, his political aspirations are on a direct collision course with his ethically challenged defrauding of local school districts.

Tom Boone’s Valley Schools Management Group (VSMG) office in North Phoenix is located just a stone’s throw from the DVUSD District Offices.   It is here, where Boone’s capitalistic greed, insider information, collaborative benefits and municipal immunity have combined to contaminate and mock the very communities he has been elected to represent.