Prosecutors to file charges in Seattle Schools financial scandal

Oct 18, 2011

It's been eight months since the Seattle Public Schools financial scandal was first uncovered, and after a full criminal investigation, King County prosecutors plan to bring charges of felony theft against Silas Potter, Jr., the man at the center of the scandal.

Potter managed the district's small-business contracting program and a review by the State Auditor’s Office revealed Potter billed the district $1.8 million in questionable contracts and services that were never delivered.

Potter and two other individuals (as yet unnamed) will be charged with stealing district money. Potter’s also accused of using district funds to pay for services that personally benefited him and his private consulting firm.

A set up?

In March, Potter told the Seattle Times he was wrongly accused and is being used as a scapegoat by district officials, whom he says, were fully aware of his conduct.  

"I've been thrown under the bus," Potter told the Times. "It's a lot bigger than Silas Potter. ... The bottom line was that I followed directions. ... I never said to anyone: 'give me money.' I defy anyone who says they gave me a penny."

The state auditor's report, which launched the criminal investigation by the Economic Crimes Unit, found the district paid preferred vendors $1.5 million for seemingly bogus services and about $280,000 for services it never received.

Insurance to cover loss

Seattle Public Schools is seeking to recover the money it claims was fraudulently stolen from the district.

Seattle School Board member, Michael DeBell told KING 5 News that the district's insurance pool will likely pay for the $280,000 that went to Potter and his company directly. The district's legal department is attempting to recover the remaining funds.

News of the financial mismanagement of the district's funds prompted the school board to dismiss, then Superintendent Maria Goodloe-Johnson in March. A review by an outside attorney hired by the district concluded Goodloe-Johnson knew about the problems and failed to act but was not directly implicated.