Updated Friday, May 1, 2015 – 1:45 PM
By Laura Coleman
BHPD Chief David Snowden’s impending retirement on June 13 after 11 years of leading the City’s elite police force may not be quite as simple as collecting an annual six-figure pension. Snowden appears to have entered into a financial conflict of interest the moment he received his first paycheck from private security company Evidence-Based Inc. (EBI), the firm hired on Nov. 12, 2013 by the Beverly Hills Unified School District to provide a contingent of armed guards comprised primarily of retired Beverly Hills police officers.
The District Attorney’s office is currently investigating what ostensibly appears to be a straight-forward Form 700 Conflict of Interest.
Following Snowden’s retirement announcement on Monday, April 20 (effective June 11) from his $428,305-a-year job, City Attorney Larry Wiener, a partner at Richards, Watson & Gershon, quickly distanced his client from any potential liability related to Snowden.
“I don’t believe that outside employment by an employee can create any financial obligation for the City,” he informed The Courier.
As a result of Public Records Act requests to the City, the BHPD and the BHUSD, The Courier mined through thousands of pages worth of documents related to EBI that show Snowden actively participated in structuring a private security “solution” for schools – while simultaneously employed fulltime for the City of Beverly Hills.
According to EBI’s CEO John McLaughlin, the Beverly Hills police chief was on the EBI payroll from October 2012 through October 2014. A copy of Snowden’s proposed contract with EBI (dated Sept. 17, 2012) states that he would be hired by EBI as a “security consultant” with a starting monthly “compensation” of $2,500 to “assist in building beneficial relationships for EBI.”
According to City records, the BHPD chief submitted a “Request for Approval of Outside Employment” on May 7, 2013, officially informing the City that he would be working for EBI starting May 31 in an “advisory/consulting” capacity and “suggesting areas of improvement of services offered by company.”
The City requires a two-signature sign-off from the Director of Human Resources and the City Manager. However, that process was not followed in Snowden’s case. Former City Manager Jeff Kolin penned the only authorizing signature. Permissions must be granted annually, however, this is the only formal permission on record.
Further, the City’s Municipal Code reads: “A full time City employee shall be prohibited from employment or engaging in business outside of their regular City employment, unless approval has been granted by the employees’ department head and the director of human services.”
Just before The Courier broke the story of Snowden’s involvement with EBI in January, then-Mayor Lili Bosse said that she, like the entire City Council, was unaware of the connection. She said she was concerned that Kolin had never mentioned the relationship.
Snowden’s most recent employment contract with Beverly Hills, signed Jan. 26, 2010, specifies that he must “obtain prior authorization from the city manager or designee for any outside employment, consulting, teaching or enterprise.”
Beverly Hills is now reforming its executive outside employment policy so that all five members of the council must sign off before department heads and executive staff can assume outside employment. Notably, City code prohibits employees from making use of City resources for personal use, including email and telephone usage.
“As per California law, the City has an ordinance that prohibits outside employment that might create a financial conflict of interest,” stated Wiener. “At the first City Council meeting in April, the council underscored its concern that the City properly monitor and regulate outside employment by City employees, particularly by exempt employees.”
Snowden announced his retirement just two weeks after the City took steps revamp its outside employment policy.
In California, elected officials and municipal senior employees are required to disclose their financial interests from sources outside their municipal employer or elected body. The disclosures are required annually via the “Form 700 – Statement of Economic interests,” which must be filed by April 1 for the preceding year.
On Snowden’s 2014 Form 700, filed just a few weeks ago, the BHPD chief reported earning $10,000 to $100,000 as a consultant for EBI last year.
According to Snowden’s 2013 Form 700, filed in April 2014, he reported making $500 working as an EBI consultant. That amount directly contradicts both his contract with EBI and copies of cashed checks obtained by The Courier payable to Snowden from EBI.
Snowden’s Form 700 for 2012 does not mention EBI, even though he filed the form over six months after he was on the payroll, according to McLaughlin.
At last month’s City Council meeting, Richards Watson attorney Lolly Enriquez, sitting in for Wiener, appeared ignorant on several elements regarding conflicts of interest when questioned by the council. While seated alongside the elected officials at the dais, Enriquez told the City Council that there were only minimal penalties associated with a conflict of interest violation, whereas penalties for City officials who make use of their position for personal gain beyond the scope of their contract can include jail time and significant fines.
According to McLaughlin, Snowden approached him in August 2012 and by October he was on the payroll.
Although the two men had previously worked simultaneously as part of the Costa Mesa Police Department (Snowden was chief and McLaughlin a patrol officer), both said they’d never met while working on that city’s police force.
After the tragedy of the Sandy Hook school shooting in Connecticut on Dec. 14, 2012 where 20 children were killed, Snowden and McLaughlin began in earnest to structure EBI’s new school security program. The innovative program aimed to marry risk-assessment with psychological analysis to support an armed presence on school sites in the wake of increasing on-campus violence.
An email dated June 7, 2013 from then BHUSD Board President Jake Manaster to his colleagues, boardmembers Lisa Korbatov, Brian Goldberg, Noah Margo and Lewis Hall–all four of whom are currently seated–marks the first instance where EBI-related negotiations with BHUSD begin to move forward with the full knowledge of all members of the Board of Education.
That email states: “Would you be so kind as to allow me to introduce a complete armed presence on all our campuses? I have a solution that has been brought to me and that I have been working on for about a year. Joe Chirillo is involved. I can bring the introduction of this at a July meeting. We have the potential to implement by December or sooner. The cost is roughly half of what the old SRO program was and I think I can work with Mayor Mirisch and Vice Mayor Bosse to make it a joint effort.”
The cost to the City was purportedly $200,000 per SRO (Student Resource Officer).
Chirillo retired from the BHPD after 32 years of service precisely one week after Manaster sent off his email, on June 14, 2013. As a sergeant, Chirillo had been responsible for running BHPD’s SRO program, which ended in 2011.
McLaughlin said Chirillo was brought onto EBI as an investor after Snowden introduced the two men.
On July 13, 2013, McLaughlin sent an email titled “Tuesdays opening statement” to Chirillo and Snowden in anticipation of making a formal presentation to the school board in a closed session meeting. Four months later the Board of Education voted 5-0 to approve a sole-source contract with EBI.
The email states: “Here is what I am thinking of saying in the open session before handing it off to Joe. Hi, my name is John McLaughlin and I am the CEO of Evidence-Based, Inc. We are a threat assessment (both behavioral and critical infrastructure) and campus safety firm. We have worked with police departments, schools districts and court systems to help keep children, families and communities safe in a meaningful and cost effective manner, for nearly 10 years now. We have a strong management team with extensive expertise and experience in public safety, law enforcement and human behavior. We offer the only holistic and comprehensive campus safety program based on our unique relationships and ability to recruit and hire with former law enforcement officers. All of you are familiar with recently retired Lt. Joe Chirillo, who is our VP of Campus Safety Solutions. Here is Joe to speak to you for a few minutes. Thoughts?”
According to McLaughlin, his presentation was subsequently hijacked by Manaster, who made his own presentation based on conversations with Chirillo.
Before voting unanimously to hire EBI, all board members extolled the prospect of having retired BHPD officers guarding Beverly Hills schools. Not one member of the Board of Education publicly questioned the hiring of a company to provide a brand new, untested security program in a non-competitive bid process.
In December 2013, BHUSD pre-paid its first six-months for EBI to staff six campus safety officers (one at each of the K-8s and two at the high school) and one supervisor, specified as Chirillo, from January to June 2014. According to the contract, Chirillo was paid $136,999 to work five days a week as a supervisor from 7:30 a.m. to 3:30 p.m.
Emails show that McLaughlin confirmed to the district that EBI’s attorneys had handled all pension issues related to hiring retired police officers subject to specific rules that limit their work in security-related fields in excess of 960 hours a year as pensioners.
Snowden’s involvement with EBI became particularly problematic when it became clear that he had actively participating in the decision-making process on behalf of the City to advise the BHUSD in the hiring of a private firm for whom he was a paid consultant.
In fact, Beverly Hills City Code 2-5-212 on outside employment does not allow Snowden to even “accept, participate, or engage in any outside employment….which causes the employee to become financially interested in any contract, sale, or transaction to which the city is a party.”
At a City Council/BHUSD Liaison Committee meeting on July 24, 2014, during an agendized discussion on “EBI Safety Plan Costs,” Snowden advocated that the BHUSD hire back an additional EBI CSO at the high school; the BHUSD had cut the number of CSO’s from six down to five on Feb. 27 for financial reasons, according to BHUSD Superintendent Gary Woods. At the meeting, Snowden said the BHPD was unable to provide such a service and it was in the best interest of the district to have at least two full-time CSO’s at the high school as a precautionary measure. Snowden, who took the lead and spoke on behalf of the additional hire, shared a printed list at the meeting detailing other school district’s SRO usage and strongly advocated that more armed guards were necessary.
Similarly, in meetings with district officials and members of the Board of Education, Snowden had supported the school district’s efforts to move forward in contracting with EBI.
As a result of that liaison meeting, which included five elected officials (then Mayor Bosse, Councilman John Mirisch, and Board of Education members Margo, Goldberg and Hall), the BHUSD went forward with a formal ask from the City to pay for half of a $880,000 annual contract with EBI. The City Council ultimately withheld the check for the cost-split.
Indeed, it was only after the City Council discovered that BHUSD had not indemnified the City on EBI’s insurance policy that civic leaders began to further probe how the company was structured.
The five elected officials in the room the day of that liaison meeting have since disavowed any knowledge that Snowden was working as a paid consultant for EBI when he actively participated in the decision-making process that resulted in the City Council voting to reimburse the BHUSD for half of the security services EBI was providing to Beverly Hills schools.
The day following the liaison meeting, Snowden appears to once again have overstepped when he actively participating in helping EBI get paid.
An email sent from Snowden’s City account to Woods with a cc to Kolin on July 25, 2013 states: “Gary: I received information this morning from John McLaughlin, CEO of EBI, that the district is in breach of contract with them regarding payment for services. He said that unless they are paid soon they will not be able to deploy in time for the Aug. 11 opening of school. This concerns me greatly. We do not have the staff or the budget to be able to cover the schools without expending overtime dollars in the event EBI is not able to deploy. I sincerely hope that this is resolved in time for us to plan alternatives before school opens this semester.”
According to McLaughlin, Snowden was waiting to get paid before leaving on a planned family trip to Hawaii.
In fact, on July 14, 2014 then-BHUSD Director of Finance Mary Anne McCabe informed McLaughlin that she had stopped the issuance of payment on advice of legal counsel.
During the summer of 2014, the district was contacted by Madison Resource Funding Corp., which EBI used to provide short-term funding for payroll and start-up costs, stating that EBI owed it money and requesting payment from the district. The company has since filed suit against EBI in the amount of $688,602.
The relationship between EBI and BHUSD officially soured on Nov. 5, 2014 when McLaughlin informed the district’s Chief Administrative Officer LaTanya Kirk-Carter that he wanted to “cut his losses” when confronted about not paying wages for three weeks to the EBI CSOs who had been working at Beverly Hills schools. With 29 days still remaining on the current pre-paid contract, the district was due $135,748 for services it never received.
Last month, BHUSD voted to spend money to defend itself from a lawsuit brought on by Madison in the amount of $402,186.50 against the district alleging that EBI had assigned to Madison in writing its right to collect EBI’s accounts receivable from the BHUSD.
Clearly, the problems related to engaging EBI are not over for the school district.
As far as the City is concerned, per Wiener, Snowden appears to be on his own.
“We wish him well in his retirement and thank him for his years of service,” Mayor Julian Gold stated in a press release sent out by the City after Snowden announced his plans last Monday.
The Courier’s Victoria Talbot extensively researched and contributed to this article.