‘Heroine,’ Wearing a ‘Wire,’ Nabs Bribing Bus Contractors

March 08, 1989 3 min read

A former auditor for the Chicago school board is being hailed as a “heroine” for her role in cracking what a federal prosecutor calls “one of the largest public-corruption cases to be brought in this district.”

Lois Kaltenbach, the 27-year-old former board employee, worked for two years as an undercover agent for the Federal Bureau of Investigation to document an alleged bribery scheme involving bus contractors.

Praising Ms. Kaltenbach’s “integrity and commitment to principle,” Anton R. Valukas, the U.S. attorney for the northern district of Illinois, announced at a press conference late last month the filing of criminal charges against three individuals and two bus companies.

He said that the auditor’s willingness to cooperate--"at considerable risk to her reputation and career"--had helped the fbi break the case.

Ms. Kaltenbach’s former boss, Donald Sparks, administrator of the board’s department of management services, was among those charged with bribery and racketeering. He could face a sentence of up to 30 years in jail and fines totaling $500,000.

Lawrence W. Rosenthal, the assistant U.S. attorney, confirmed late last week that all those so far charged in connection with the scandal had pled guilty.

Ms. Kaltenbach began working for the fbi in 1985, after she was offered a bribe to overlook an inflated bill from a school-bus contractor.

She went first to her supervisors with the information, Ms. Kaltenbach said, but when no action was taken on her complaint, she turned to the fbi for help.

Outfitted by the agency with a hidden microphone, she returned to work and recorded for two years transactions in which she and Mr. Sparks accepted more than $200,000 in bribes from the bus contractors.

At the press conference, Ms. Kaltenbach told reporters she had been afraid of being discovered during her undercover work and had “worried about my physical well-being.”

But she had never had a second thought about going to the authorities with her story, she said, explaining, “I was apalled that someone8would attempt to bribe me.”

Robert Saigh, a spokesman for the school district, said it had offered its “full cooperation” in the investigation after the undercover phase ended, making available records and documents to law-enforcement officials.

He also said that over the last three years, the district had undertaken an “extensive monitoring progam” of its approximately 25 school-bus contractors “to ensure that the school system is receiving the services” it contracted for.

Mr. Saigh said the district was conducting an “in-house inquiry” into Ms. Kaltenbach’s contention that she informed superiors of the bribery.

Six “key people she might have gone to were asked if they had been approached at all [and] said they hadn’t been approached and knew nothing about the activities she reported,” Mr. Saigh said. None are suspected of wrongdoing, he added.

According to Mr. Rosenthal, the bus-contracting charges were theel10lfirst criminal violations to arise out of a broader, two-year investigation by the U.S. Attorney’s office of alleged corruption in the Chicago board of education.

In addition to Mr. Sparks, those charged in connection with the case include Bernard Cohen, 65, of Lincolnwood, Ill., who allegedly furnished “multiple bribes” to Mr. Sparks to obtain favorable treatment for the Student Transit Corporation, with which he was affiliated.

Mr. Cohen is also charged with racketeering and faces the same sentence and fine as Mr. Sparks. The Student Transit Corporation, which employed Mr. Sparks after he left the school board in 1987, was charged with bribery.

Julius Polan, 62, of Northbrook, Ill., the owner of the Northtown Bus Service, Ltd., allegedly paid more than $200,000 in bribes to Mr. Sparks and Ms. Kaltenbach to obtain preference in contracting.

Mr. Valukas also indicated that the company later “submitted fraudulently inflated bills” for service.

Both Mr. Polan and Northtown have been charged with mail fraud as well as bribery. Mr. Polan could receive up to 10 years in prison and a fine of up to $500,000. His company also faces a possible $500,000 fine.

Mr. Polan and the Northtown Bus Service have already agreed to pay $1.2 million in restitution to the Chicago Board of Education, Mr. Valukas said.--pw

A version of this article appeared in the March 08, 1989 edition of Education Week as ‘Heroine,’ Wearing a ‘Wire,’ Nabs Bribing Bus Contractors