A former Beverly Hills Unified School District employee concocted a scheme to get paid more, and managed to get millions before a new employee blew the whistle, according to a Court of Appeal ruling.
The court’s opinion describes how Karen Christiansen convinced the school board to let her stop being a district employee and instead hire her as a contractor.
Christiansen had been director of planning and facilities at the district, with an annual salary of $113,000. She left and formed a one-person limited liability company where she performed the same duties, but under a contract reviewed by an assistant superintendent who was her friend, received $1.3 million in 2007 and $1.39 million in 2008.
In 2008, Christiansen lobbied the board to place a $334 million school bond on the ballot. After voters approved the bond, Christiansen received a no-bid contract worth $16 million for program management and project management. Between November 2008 and August 2009, her LLC collected more than $2 million in management fees, despite no specific projects being approved.
A new superintendent and the board later voided the contract under Government Code Section 1090 for a conflict of interest. Christiansen and her LLC sued and a trial court decided that her contract was improperly terminated because Section 1090 does not apply to LLCs. A jury awarded Christiansen’s company $20.32 million in damages.
The Court of Appeal overturned the trial court and ruled that Section 1090 does apply to LLCs, and in this case to Christiansen because she “used her position of trust as an employee to ingratiate herself with the District’s administrators.” The court reversed the judgment and awarded costs to the school district.