Torrance Schools One Step Closer to Recovering $109 Million

Taxpayer and concerned resident Jim McGee scored a key legal victory in his quest to return $109 Million to Torrance schools after the Second District Court of Appeals recently ruled in McGee’s favor. McGee is the lead plaintiff in ongoing litigation against Balfour Beatty Construction (BBC) alleging many of the contracts entered into between Torrance Unified School District (TUSD) and Balfour Beatty Construction (BBC) are illegal due to a conflict of interest.

According to the lawsuit, TUSD hired BBC to act as the District’s construction consultant/manager.  In that role, BBC acted as an agent for the District and developed the scope, determined the requirements, and set the budgets/schedules for the bond projects. BBC also helped the District pass the bond measures by funneling thousands of dollars into the campaigns.  Once the bonds were passed, the District awarded construction contracts to BBC without soliciting competitive bids using a form of contracting dubbed lease-leaseback.

In an effort to kill the litigation, attorneys for BBC and TUSD had argued that McGee lacked standing to bring the lawsuit. Ironically, the logic behind the argument was that any lawsuit challenging the legality of the contracts should have been brought by the TUSD School Board and not a taxpayer representative. The Second District Court of Appeals affirmed, however, that McGee has legal standing to challenge the contracts.  The Court also affirmed that the conflict of interest claim is a valid cause of action thereby allowing the suit to move forward.

The decision is similar to one meted out last year by the Fifth District Court of Appeals. That decision prompted BBC to halt construction on Torrance schools last summer. In light of the favorable ruling on McGee’s behalf, TUSD is facing renewed calls to cease opposing taxpayer efforts to recover the $109 Million in funds.  TUSD has not disclosed to the public how much money it has spent fighting the recovery of these funds, but one Bond Oversight Committee member has confirmed that the District is using bond money to pay for the legal costs.

The recovery of the $109 Million to Torrance schools is also threatened by powerful interest groups that are lobbying the state legislature to amend the law in order to remove any liability they may have incurred due to these illegal contracts. One such effort, Assembly Bill 978, was rejected last year.  Another, AB 2316, is set to be heard by the Assembly Education Committee this Wednesday, May 4, 2016 at 1:30 p.m.

At least one group has established a website requesting people e-mail, call, or tweet members of the Education Committee urging them to “Let the committee members know that you won’t stand for this corrupt, back-room deal to let people, who knew they were violating the law, off the hook.”