Federal investigators: State senator used 'improper relationship' to make money
(KUTV) — Dr. Ben Johnson had only been on the job as director of Treeside Charter School in Orem for a few months when he got difficult news.
Johnson received a letter from the Universal Service Administrative Company (USAC), an independent, not-for-profit corporation who administers programs for the Federal Communication Commission.
In the letter, the agency told Johnson that he would have to pay back more than $43,000 the school had received from the FCC as part of a grant obtained from the agency. (see document below)
USAC said there were problems created by the relationships of sitting Utah State Sen. Lincoln Fillmore (Dist. 10-R). The USAC report prepared on behalf of the FCC says, “after a thorough investigation,” Utah company H-Wire Technology Solutions had “engaged in an improper relationship with Charter Solutions president Lincoln Fillmore.”
Fillmore owns both Charter Solutions, a private charter school management company, and was an original investor in H-Wire.
H-Wire provides computer and internet services to schools. USAC says H-Wire had an unfair advantage over other bidders when Treeside and 4 other schools hired the company to administer computer and internet upgrades. USAC suggests Fillmore guided his Charter Solutions clients to hire H-Wire.
Fillmore says the findings of the report are flawed. He told 2News:
The government agency, USAC is really making stuff up in an arbitrary and capricious manner, (and) that’s’ really harming Utah’s public schools.
He says he and his companies followed all of the government’s rules. Fillmore says he told everyone, including the federal government and Treeside, about a potential conflict of interest (see the document below). He says he has never tried to convince anyone at Treeside, or elsewhere, to hire H-Wire.
Dena Lundgreen was one of the founders of Treeside. She left in March but says she hired Charter Solutions to manage the school.
Lundgreen says she had never heard of H-Wire until Fillmore mentioned the company to her. Lundgreen says she decided to choose H-Wire over 4 other companies, most of whom had bid less than H-Wire.
“I had already sort of felt secure in H-Wire because Charter Solutions had introduced me,” says Lundgreen.
Fillmore says although he may have mentioned H-Wire to Lundgreen, he never pushed her to hire the company. Fillmore says he has gone to great lengths to make sure H-Wire and Charter Solutions are kept separate.
"There is complete separation between the companies,” says Fillmore.
However, when 2News visited the H-Wire offices in Draper, H-Wire and Charter Solutions are both located in the same office suite, separated only by a set of stairs. This was something Reporter Chris Jones pointed out to the senator in a sit-down interview.
Chris Jones: “But come on, if you needed to talk to someone at H-wire just pop down the stairs and you guys can consult and have a conversation. That’s the problem that USAC found and what also looked peculiar to us.”
Lincoln Fillmore: “Ok, let me take a breath and answer it this way. USAC has rules and guidance, right? And we were very careful to follow every rule and guidance they had."
But USAC clearly disagrees with Fillmore’s assessment and is now ordering Treeside, not Fillmore or his companies, to repay the FCC money.
Also, Beyond the Books has confirmed that 4 other schools managed by Charter Solutions may have to pay back money as well. The schools may have to return a total of $100,000 because of the so-called “improper relationship” between Fillmore, Charter Solutions and H-Wire. (see bid evaluation matrix below)
It is important to note, Fillmore is not just any senator. He has incredible power in the legislature when it comes to education and charter schools.
Fillmore sits on the Senate Education Committee and the Public Education Appropriations Subcommittee. Fillmore often uses his credentials to market himself to potential clients.
Beyond the Books obtained an email in which Fillmore brags about his powerful duties in state government. He said in that email:
I am an elected state senator in Utah, I have influence in state education policy that has an impact on your schools.
Since the situation with the FCC came to light, Dr. Johnson has fired Charter Solutions.
As for Lundgreen, she says she may have been naïve about starting a charter school and may have leaned too heavily on Charter Solutions. She says she thinks Fillmore took advantage of that.
“We trust, we trust. Once again, I think it’s very easy, not being a businesswoman, at that time to just trust,” says Lundgreen.
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