Local News

FORT LAUDERDALE (CBS4) ―  

In November 2007, undercover federal agents met with Broward School Board Member Beverly Gallagher at a party in Ft. Lauderdale. The undercover agents were posing as asset managers representing contractors looking for government contracts.

According to a federal criminal complaint, Gallagher took the bait, agreeing to send business to the contractors.

Gallagher told the undercover agents they could "make a lot of money together," according to the criminal complaint.

That was the beginning of a nearly two-year investigation of Gallagher that culminated on Wednesday, with Gallagher's arrest on wire fraud, bribery and extortion charges.

In all, the FBI accuses Gallagher of taking three separate payments in exchange for assisting companies looking to win construction work from the school district.

CBS4 News tried on two occasions to speak with Gallagher on Wednesday. She refused.

The complaint is raising new questions about the way the school district awards construction contracts and whether proper oversight is in place.

"Anything like this absolutely does bring into the question the integrity of the full organization," Broward Schools Superintendent Jim Notter said. "I can only stand here and reassure our public that this is a quality school system.

Clearly, we are going to remain transparent under this federal investigation, and if during that time there are other things that come up that we need to take aggressive action on, we absolutely will do that."

Notter said several years ago the school district changed the way it evaluates and qualifies contractors and awards construction contracts. Currently, the district uses a procedure called Qualification Selection Evaluation Committee, or QSEC. Eleven members, including two elected school board members, comprise the QSEC.

Notter said no decisions have been made on whether to change the QSEC.

"In light of this we really want to take a look right now at whatever documentation and evidence that's provided there, and ultimately see the need to go in and look at QSEC," he said.

Notter added that Gallagher's alleged actions will cause the school district to look closely at what the federal authorities uncover.

According to the criminal complaint, Gallagher first received a payment from the undercover federal agents in February 2008 after becoming a consultant for a glass company looking to become pre-qualified for construction work in the school district.

The FBI agents write that Gallagher set up a meeting with a "high ranking school board official." That official is not named in the criminal complaint.

The first payment was for $2,000 that was given to Gallagher inside a day planner, according to the federal document. Gallagher allegedly placed the day planner in a plastic bag which also contained leftovers from a meal.

Several weeks later, Gallagher received another payment, according to the FBI. That payment of $1,500 was for "arranging a meeting with the voting members of QSEC and other Broward County public officials" and a construction company interested in government contracts.

The final payment to Gallagher came on December 23, 2008, the criminal complaint says. In that case, Gallagher is alleged to have received $3,000 for "hooking up" a construction company for subcontracting work. According to the FBI, Gallagher was told at that meeting that larger payments would come once the construction company started doing subcontracting work.

This payment revolved around a construction contract for a $71 million project at Hollywood Hills High School.

According to the FBI, Gallagher turned to school district employees she knew to help steer the contract to a specific large construction company that was "on board" with hiring the subcontractor.

On February 4, 2009, the feds say Gallagher made a series of phone calls and sent numerous text messages to learn if "everybody came through like I wanted them to come through," the complaint reads.

The contract was eventually awarded to the construction company Gallagher preferred. Ultimately, however, news reports indicate that the construction project was stopped due to the budget constraints.

The criminal complaint does not name any school district employees by name. However, it does mention several titles -- like area superintendent, deputy superintendent of facilities and Hollywood Hills High School principal. According to the feds, Gallagher said she told these employees how to vote on the Hollywood Hills High construction project.

"It absolutely is a concern said about any of our employees," Notter said. "And that's why we're going to be taking that opportunity to look through the information and have those debates in house to see the validity of it."

CBS4 News has learned that at least two of the school district employees referenced by title in the criminal complaint did speak to federal authorities on Wednesday.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

Don't Let The Bad Economy Get You Down!

• Fabulous Freebies Found Online
• Weddings On A Budget
• Cutting The Cord On Your Landline
• Save On Skin Care
• Car Care Saves Hundreds