Competition Matters

Judy Green was a public schoolteacher of more than 30 years, who used her knowledge of the E-Rate program, a funding program for schools, to market an illegal bid-rigging scheme to low-income, undeserved community schools.

The E-Rate program allowed poorer community schools an opportunity to receive funding for telecommunication and Internet access. Green met many of her clients at conferences, approaching school administrators and offering to help their schools obtain E-Rate funding. Green benefited by assisting her clients with the application because it was a complicated process and the instructions were less than clear. She manipulated the application if it was questioned or reviewed.

To qualify for E-Rate funding, the schools needed to pay a 10% co-pay of the costs and equipment. Green promised that the co-pay would be forgiven. To do this, Green selected contractors who would offer to donate “bonus” equipment such as personal computers, monitors and a variety of equipment that benefited from internet connections. This “bonus” equipment was considered “ineligible” for E-rate funds.  

Green’s scheme involved bid-rigging, using complex Request for Proposals, commonly known as “RFPs.”  The specifications for the projects were “ridiculous” and deterred responses from competitors, which limited competition.  Green’s selected contractors received an advanced copy of the RFPs and worked to her specifications. The contractors would submit their bids as instructed by Green, inflating their bids to cover the cost of the “bonus” equipment promised by Green. Green orchestrated many parts in obtaining funding for the school. In the end, the districts would choose Green’s choice of contractor to implement their technology projects.

In September 2007, Judy Green was convicted of 22 counts of fraud, bid-rigging and conspiracy to commit wire fraud.  Green controlled the bidding process and was instrumental in “multiple bid-rigging conspiracies.” This anticompetitive behavior is prohibited under the Sherman Act.

Green’s story serves as an important reminder for all public entities. Use extra caution when considering whether to contract with consultants who make unsolicited offers to help you secure grant money or other funding. 

The Ohio Attorney General’s Office has received recent reports of aggressive consultants who have succeeded in getting paid for services that either aren’t really needed, are of poor quality, or both.  Sadly, public schools seem to be a favorite target of these individuals.

Many consultants are honest and provide great value to their public entity clients. Green was not one of them. Let’s hope this former teacher has now been educated regarding the law.