1/9/2018Texas: Guilty Plea In School Bus Camera Bribery Scam
First guilty plea to money laundering entered in Dallas, Texas school bus camera scandal.
Just two days after Christmas, real estate broker Slater Washburn Swartwood Sr admitted his involvement in a multimillion-dollar bribery scam involving school bus ticket camera firm Force Multiplier Solutions and the Dallas County Schools (DCS). After tendering a guilty plea to the US District Court for the Northern District of Texas, Swartwood faces up to five years in federal prison and a $250,000 fine for conspiracy to commit money laundering.
At the heart of the bribery scandal is the 25 year contract between the Dallas County Schools and Force Multiplier Solutions to provide automated ticketing cameras for school buses. The deal promised to bring millions to the school board, but the cameras fell far short of generating the expected windfall. The company's primary competitor, Redflex Traffic Systems of Australia, itself caught in a bribery scandal, also found profitability far more difficult to achieve. The difference is that Force Multiplier Solutions collected $70 million while the school system fell into massive debt as a result of the program.
The real motive for the school bus camera's loudest advocates proved to be personal gain. Ostensibly to make up for the bus camera program's financial losses, the school board turned to a real estate deal with Swartwood, a longtime associate of Force Multiplier Solutions CEO Robert Leonard. The deal would provide $25 million in up-front cash to cover mounting DCS losses, but over time DCS had to make $48 million in loan payments, a fact exposed by the investigative reporters at KXAS-TV. Federal investigators conducted raids to gather evidence to find out what was going on, and they concluded that crimes had been committed.
"The ongoing business relationship between Company A [Force Multiplier Solutions] and the state agency [DCS] generated millions of dollars in revenue for [Force Multiplier Solutions], a portion of which Person A [camera company CEO Robert Leonard] illegally kicked back to Person B [DCS superintendent Rick Sorrells] in return for further agreements and camera-equipment orders," assistant US attorney Andrew O. Wirmani wrote.
To help land the lucrative deal, Swartwood, his family members and Leonard poured thousands in cash into the campaign coffers of school board members. DCS Board President Larry Duncan, for example, pocketed nearly a quarter million in campaign cash.
Swartwood admitted that he used shell companies to funnel $2 million in cash from Leonard to Sorrells. Swartwood attempted to conceal the payments by creating fake loans that Sorrells was never expected to pay back.
The Dallas City Council last week began reviewing its options after 58 percent of voters in November decided to shut down Dallas County Schools. The city council finds itself in a tough spot since it voted in 2015 to extend the bus camera contract through the year 2040 as a means of evading possible statewide legislation that could shut down the cameras.
"Company A [Force Multiplier Solutions], which was owned and controlled by Person A [Robert Leonard], sold cameras and related services for school buses," assistant US attorney Andrew O. Wirmani wrote. "[Force Multiplier Solutions] entered into various contracts and a licensing agreement with a Texas state agency [DCS] acting through its superintendent, Person B [Rick Sorrells]. Under these contracts and the licensing agreement, the state agency purchased millions of dollars of camera equipment from [Force Multiplier Solutions]."
All of these contracts, agreements, and purchase orders were entered into by [Leonard] and [Sorrells] on behalf of their respective organizations.
Swartwood's arraignment has not been scheduled, nor have other indictments in the case been announced.