School Board Leak
This past Friday an article was published on a local parenting blog discussing a missing tax form incident that occurred in the Tahoma School District several years ago. The article alleges that the finance director, Lori Cloud, failed to submit some specific paperwork to the IRS that could have resulted in upwards of two million dollars in fines. The articles goes on to say that the paperwork was eventually submitted, and the fines waived, but only after a brand new employee filed a whistleblower complaint.
We have several questions about this article. To start, why did the whistleblower go straight to making a formal complaint rather than telling anyone else at the district that a set of IRS forms hadn’t been filed properly? The article makes it clear that the financial office was the only one aware of this issue, so providing a written complaint to the superintendent would have been the logical next step. See also the district’s procedure for whistleblowing, specifically the section under Reporting. (It is possible that the article simply conflates a formal whistleblower complaint with the standard procedure that the district uses for concerns brought by employees. Perhaps the person in question did use the standard procedure.) Whistleblowers typically receive reward money from the government for their whistleblowing efforts, in accordance with the fines incurred. This would have been an incentive for this person to file a complaint rather than moving up the chain of command, if that is indeed what happened. According to the article, once the paperwork was properly filed the IRS dropped the fines, so no reward would have been given. The IRS is typically averse to fining public school districts for missing paperwork, if at all avoidable, and would rather work with the district to remedy the issue and bring them back into compliance. That appears to be exactly what happened here.
On the topic of the whistleblower, the writer(s) seem very concerned about retaliation against the whistleblower in question, yet they publish the entire name, signature, and employment details of this person. This seems unnecessarily cruel. While it is illegal to discriminate based on whistleblower status, it is still the case that whistleblowers can have a difficult time finding future employment. Sharing identifiable details about this person may have been done in an effort to make the article more credible, but one hopes that the person in question was contacted first. We will not be sharing their full name here nor do we encourage retaliation against this person. While their actions might have been out of line with standard protocol, whistleblowing is necessary in any public or economic system and should be protected.
Our last, and biggest question, is where did this information come from? As this was a personnel issue, it legally would have to have been discussed behind closed doors. Indeed, the article implies that this all came out of several executive sessions of the school board and district administration, and that the writer(s) had been in contact with one school board member in particular: Former school board director Valerie Paganelli, who resigned her position in February of 2022. (We have no reason to suspect her involvement, other than what was alleged in the article itself.) Information discussed in executive session is considered confidential. Where did the writers of this article get the tip to do such a specific public records request?
In the end, optics aside, this was a case of missing paperwork and a district employee not prioritizing it. The eventual cost to the district was $8000 in legal fees, and the employee was not sanctioned. (Though she is, in fact, retiring after this school year.) The optics are another issue, of course, especially the question of who is leaking executive session discussions of personnel matters. This could be a thorny legal issue for the district moving forward.
