Clip 10: Helping to land the big one? / Exclusive: DISD official, vendor say use of yachts didn't help contracts
We revealed that a Dallas schools computer vendor had given technology chief Ruben Bohuchot the frequent, free use of a yacht. As the FBI moved in to investigate, Bohuchot was pushed out of the district.
By PETE SLOVER and JESSICA LEEDER
Dallas schools' chief technology boss has for years accepted the free, regular use of luxurious sport-fishing yachts owned by a top provider of computer hardware to DISD, records and interviews show.
Ruben Bohuchot, a Dallas Independent School District associate superintendent, told The Dallas Morning News that the sea voyages grew out of his relationship with Frankie Wong, president of Houston-based Micro System Enterprises.
Micro System has secured federally funded Dallas school district contracts potentially worth hundreds of millions of dollars since 2003.
He and Mr. Wong both said that Mr. Bohuchot's use of the 59-foot Sir Veza II - purchased for $789,000 - and a predecessor vessel in no way influenced the contracting process. They also said Mr. Bohuchot did not help Micro System win district business even though he wrote the specifications for jobs and negotiated the final terms of contracts after they were awarded.
"I have not been involved on a procurement decision on these contracts," Mr. Bohuchot said.
Said Mr. Wong: "I don't think it's wrong, but I know a lot of people would think it's wrong. ... At one point we became friends. I can't control that."
On Friday, a day after The News raised questions, DISD officials said they had opened an investigation of Mr. Bohuchot, 56, who earns $143,492 in addition to a $4,000 annual car allowance. District policies prohibit employees from taking gifts or favors from vendors other than novelties such as key chains and coffee mugs.
Boats in the class of the Sir Veza II commonly rent for more than $1,800 a day.
There are a number of state and federal laws prohibiting the exchange of benefits between public officials and vendors.
Mr. Wong is one of three Micro System executives who are principals in a Delaware corporation that purchased the Houston-based boats Sir Veza and Sir Veza II. He said his seagoing with Mr. Bohuchot is strictly social, though he acknowledged his friendship arose from their professional contact.
"When Ruben comes down, he's my friend; we don't ever talk business," Mr. Wong said. "When you work with someone 10 hours a day over three to four years, you kind of develop that relationship. I know it's probably not right, but we always separate the business side from the personal side."
Said Mr. Bohuchot: "He'd call me and say, 'Look, if you want to use the boat to go fishing, help yourself.'"
Relationship with Wong
In an interview with The News on Thursday that was attended by his boss and a district press officer, Mr. Bohuchot initially described his relationship with Mr. Wong as "a beer and lunch occasionally."
But, when pressed, Mr. Bohuchot confirmed:
- Since Mr. Wong first purchased a 46-foot boat in October 2002, Mr. Bohuchot has used the vessels "every five or six weeks," including an outing with his family this month to Key West, Fla.
- He has taken the boat on voyages with no Micro System executives present, and he has been consulted by the yacht's skipper on operational questions, such as whether to ride out Hurricane Dennis during the recent trip.
- He and a Micro System vice president entered and won third place in the four-day Key West Marlin Tournament last year. The entry fees, paid by Mr. Wong, were at least $1,500.
- Mr. Wong or his company provided Mr. Bohuchot some meals and covered all expenses of the boats' operation, including wharf fees, purchase payments, insurance, fuel, repairs, and a full-time skipper and part-time crew.
- He helped choose the name Sir Veza for the two boats. Mr. Bohuchot said he recommended the name after it was suggested by "a friend of mine." Mr. Wong said the two decided the name together, drawing their selection from 10 finalists placed in a hat.
- He accompanied Mr. Wong to Fort Lauderdale, Fla., last year to help select the 59-foot Viking yacht that would be purchased and rechristened Sir Veza II. Mr. Wong said he paid expenses other than airfare for the trip; Mr. Bohuchot said he got his ticket through a frequent-flier award.
"He volunteered," Mr. Wong said. "He said, 'I know a lot about boats.'"
Mr. Bohuchot said Mr. Wong appreciated his expertise in things maritime.
"I was involved in boating for years. I've got friends that own boats in Hawaii, the Bay Area, Michigan and in Florida."
Mr. Bohuchot said he paid his own travel and lodging expenses during the yacht trips, mainly along the Texas Gulf Coast, but he didn't respond to requests that he provide documentation of those payments.
Consortium
Since 2003, Micro System has been designated as the recipient of more than 96 percent of all funding DISD has applied for - $369 million in all - through the federal E-rate program for school technology. The E-rate program has been beset by allegations of waste, fraud and bid-rigging nationwide.
District officials said the company is the lead partner in a consortium of vendors who split E-rate funding. Spokesman Donald Claxton said Friday that the consortium is "paid as a whole, and we are not aware of the percentage breakdown."
Mr. Bohuchot said Micro System won its E-rate contracts and other deals with DISD without his influence, based on low price and good service. He also noted that vendors on all computer contracts over $50,000 are chosen by a committee and that he has no contact with or influence over the committee.
He said his role in the process included:
- Preparing the bid specifications.
- Making initial contact with potential vendors.
- And negotiating final contract terms.
Documents show Mr. Bohuchot also signed the forms submitted by the Dallas district to secure E-rate dollars.
Before the subject of boat use and travel came up in his interview with The News, Mr. Bohuchot volunteered that in 2003 he had been anonymously and wrongfully accused of taking gifts and trips, including "a cruise" from vendors. Later, he said, he was cleared.
In November 2003, Superintendent Mike Moses disclosed the accusations to DISD trustees in a memo without giving specifics.
Dr. Moses said both he and Larry Groppel, the deputy superintendent who would serve as interim superintendent after Dr. Moses' departure last year, met with Mr. Bohuchot "several times ... about the allegations."
"Obviously, I believe these allegations are false, or the individual would bring them forward by name, rather than do so anonymously," Dr. Moses wrote.
Both Dr. Moses and Dr. Groppel declined interview requests through DISD on Friday.
By all accounts, Mr. Bohuchot volunteered for an audit of his personal finances by outside consultants from KPMG. He said he provided auditors access to his bank and credit card records, income tax papers and anything else they wanted.
The auditors, who were paid $50,000, told the district in about March 2004 that they had found no support for the anonymous whistleblower's charges, Mr. Bohuchot and school district officials said. They declined to release the written results from that audit, saying they concerned a private personnel matter.
DISD trustee Ron Price said he talked by phone to Mr. Bohuchot Friday morning.
"He told me he hasn't violated any rules or policies," Mr. Price said. "He's been thoroughly investigated just a year ago. The guy came out squeaky clean."
Records suggest that the trips on Micro System's yachts were well in progress by the time of DISD's internal questioning and the KPMG audit; according to Coast Guard documents, Sir Veza was named in March 2003, a rechristening in which Mr. Bohuchot said he participated.
History
Mr. Bohuchot, who joined DISD in September 1999, said Micro System began doing business with the district after a sales representative's cold call in about 2000.
In October 2002, Statewide Marketing LLC, a company whose management is confidential under Delaware corporation laws, purchased the 47-foot fishing yacht Shadana, which was renamed Sir Veza.
Mr. Wong signed a $260,000 promissory note for the boat, listing himself as the company's managing member.
About three months later, DISD notified federal E-rate officials they were seeking funds for deals with Micro System totaling more than $157 million. In late March 2004, federal officials authorized expenditures of up to $125 million of that amount. Of that, DISD's responsibility under the E-rate deal is estimated to be more than $15 million.
The money is to cover technology upgrades, such as Internet cables and other equipment, at dozens of Dallas schools.
Within 12 weeks of the federal approval, Mr. Wong and Mr. Bohuchot had picked out a new boat. On June 11, Statewide Marketing traded in the Sir Veza to a Galveston yacht broker. Two weeks after that, the company spent $789,000 on the 59-foot Viking yacht, Therapy.
"They were in a hurry," said Tony Dinos, the Fort Lauderdale yacht broker who handled the sale, about a month before the Key West Marlin Tournament. "They wanted to do that tournament."
On July 21, 2004, Therapy was rechristened Sir Veza II, just in time for the opening day of the fishing contest. Over three days, Mr. Bohuchot and Micro System executive Bill Froechtenicht each caught a sailfish, netting the $5,000 third-place prize among 76 boats.
Last December, Micro System got the first of nearly $30 million in federal funds it has collected so far through E-rate, according to Funds for Learning, a for-profit consulting firm that collects data on the program and advises vendors and districts seeking federal funds.
Mr. Wong said he didn't know how much his company has earned on Dallas school contracts, even in ballpark figures, or what percentage of the E-rate consortium funds go to his firm. He also couldn't say if DISD is the biggest customer for Micro System, which does business with school districts in eight states.
The company Web page says the firm earns about $150 million a year, but it's unclear if that represents profits or total sales.
