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New York Board To Bring Charges Against Alvarado

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The head of the nation's largest public-school system was suspended last week after only 11 months in his $95,000-a-year position.

The New York City Board of Education last week suspended Schools Chancellor Anthony J. Alvarado after holding closed-door sessions over several days in the wake of reports that the school official may have been involved in unethical financial dealings with his subordinates.

The board also indicated it would bring a series of charges against Mr. Alvarado this week and it named Richard C. Failla, New York City's chief administrative law judge, as a hearing officer to review the charges and recommend to the board what further actions, including dismissal, might be taken against Mr. Alvarado.

The conduct of the schools chancellor is also being investigated by state and federal law-enforcement agencies, including the district attorneys of Manhattan and Brooklyn and U.S. attorneys of the Eastern and Southern Districts of New York.

In conjunction with Mr. Alvarado's suspension, the board temporarily passed the leadership of the 900,000-student system to Nathan Quinones, who was promoted from head of the high-school division to deputy chancellor.

The 41-year-old Mr. Alvarado, who had for 10 years been the superintendent of one of the city's community school districts, was named last April to replace former Schools Chancellor Frank J. Macchiarola. At the time of his appointment, school officials cited Mr. Alvarado as a sometimes unorthodox, but always dynamic, leader who had developed innovative programs for students and upgraded the performance of the schools in his district.

Reasons for Action

The board last week initiated its action against Mr. Alvarado, who will continue to draw his salary during his suspension, by passing a resolution citing him for "conduct unbecoming his position and conduct prejudicial to the good order, efficiency, and discipline of the service; violation of the bylaws, rules, and regulations of the Board of Education; and substantial cause that renders him unfit to perform properly his obligations to the service."

Mr. Alvarado is alleged to have commited a number of impropri-eties, including accepting some $88,000 in loans from a number of subordinates and soliciting loans from others, failing to report $128,000 in income on his tax returns, and submitting false and misleading documents to banks in applying for mortgages.

The charges against Mr. Alvarado, said to be unprecedented against a schools chancellor in New York City, will be heard by a hearing officer, most likely a prominent lawyer or former judge, appointed by the board, according to Mr. Terte. The quasi-judicial hearing will allow Mr. Alvarado the right to counsel and will include the examination and cross-examination of witnesses.

State, Federal Probes

The hearing officer will then present a "finding of facts" to the board, which then will decide what action, if any, to take against Mr. Alvarado. A hearing date has not been set yet.

On March 22, the New York City Department of Investigations, an agency that does not have the authority to take legal or disciplinary action, released a 31-page report critical of Mr. Alvarado's actions.

It charged that the schools chief frequently solicited money from subordinates "in a manner that was inherently coercive and frequently deceptive," that he apparently failed to report $128,000 as income on his tax returns, and that he submitted false and misleading documents, including falsified leases, to banks in applying for mortgages. It also concluded that Mr. Alvarado violated the Board of Education's conflict-of-interest provisions and the City Charter's ethics standards.

Voluntary Leave

The day before the department's report was released and several days before the board of education suspended him, Mr. Alvarado announced he was taking a paid leave of absence from his job.

In a statement that accompanied the announcement of his leave, Mr. Alvarado said, "I never used public funds or the public system for personal gain. My professional judgment was never influenced by private transactions. I stand before you and am proud to say that I never compromised my integrity or my commitment to the children I have been honored to serve."

After the investigations department released its report the following day, Mr. Alvarado, speaking through his lawyer, Thomas P. Puccio, said he stood by his statement. He did not respond directly to the department's charges against him.

Unfairness Claimed

Last week, in his first public comment on the affair since he announced his leave, Mr. Alvarado said during a speech to students and faculty members at City College of New York that his treatment had been "grossly unfair" and that he had been denied due process.

He said that once he has been given a fair hearing, he will emerge as "a fallible human being, but not an evil one."

Asked by a member of the audience whether his conduct had damaged his ability to be a model for students, Mr. Alvarado said, "I think the first thing everybody has to know is that we're all in trouble. If every single personal transaction, every single behavior, every single fault in the private arena were to be made public, there would be no person on this earth who could stand that public scrutiny."

The audience gave Mr. Alvarado a standing ovation at the conclusion of his remarks.

Borrowed Money

According to the investigations department's report, Mr. Alvarado's financial dealings came to light on Feb. 27, after documents found by police in the apartment of an employee of Mr. Alvarado's, John Chin, revealed that the chancellor had borrowed large sums of money from him. Mr. Chin's apartment had been searched following his arrest on several charges, including firing a gun into a neighbor's apartment.

The report said when the chancellor learned of the police department's discovery he went to the department voluntarily.

Shortly afterwords, Mr. Alvarado informed the news media that he had gone to the Department of Investigations.

Mr. Alvarado told the investigations department that he had borrowed up to $26,000 from Mr. Chin, who had worked for him when he was a district superintendent of schools in East Harlem and later when he became chancellor.

Mr. Alvarado told the department's investigators and said publicly at that time that Mr. Chin did not benefit from making the loans and that the loans were the only such funds he had received. The report, however, alleges that Mr. Alvarado found Mr. Chin a job in 1976 when Mr. Chin, then a teacher, was scheduled to be furloughed.

A week after Mr. Alvarado initially spoke to investigators, he disclosed that he had accepted another $63,260 in loans from 11 other people, including subordinates.

The report says that Mr. Alvarado, who, city records show, also had accrued $2,100 in unpaid parking tickets as of last month, pressured employees for loans, which he said he needed to invest in a real-estate venture. It also states that in other instances, Mr. Alvarado asked some employees to solicit loans on his behalf from their colleagues.

The department also "found that some of the employees, [including Mr. Chin], received extraordinarily high and/or substantially increased [overtime] payments after making the loans" to Mr. Alvarado.

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