Jeffrey D. Sadow is an associate professor of political science at Louisiana State University Shreveport. If you're an elected official, political operative or anyone else upset at his views, don't go bothering LSUS or LSU System officials about that because these are his own views solely. This publishes five days weekly with the exception of 7 holidays. Also check out his Louisiana Legislature Log especially during legislative sessions (in "Louisiana Politics Blog Roll" below).
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7.11.16
Scam at EBR schools highlights need for choice
This should make Louisiana taxpayers hopping mad
and does nothing to build trust in traditional public school systems, if not
encourage educational choice.
Turns out the East
Baton Rouge Parish School System got hooked by a phishing scam. A senior
executive not once but twice inexplicably sent $46,500 to two suspicious bank
accounts in a span of two days, and may have done it a third time except another
administrator figured it out. The rules called for his countersignature on all
of them, but in the first two instances he was out of town so she went ahead
and violated the rules to do it anyway.
More specifically, the notes purported to come
from Superintendent Warren Drake, who the recipient was led to believe could
not be disturbed in his office – next door to hers. The sender address clearly
did not come from EBRPSS personnel. It directed to send an amount of $22,500,
and then $24,000 the next day, to the New York City area to names associated
with people from Nigeria, giving their banking information.
Let’s say you’re this administrator. You get a
note allegedly from the top man, apparently only meters away from you, even
though it’s from an e-mail address you’ve never seen before. Several notes go
back and forth, culminating in those from the faker giving out personal banking
information, unencrypted, and no explanation for wiring such large amounts
immediately to someplace halfway across the country. The notes themselves would
not appear to mimic somebody with Drake’s advanced degree and communication
skills, and the content evades certain questions such as where to expense the
amount. And then, without knocking on a door or making a call, you go ahead and
violate procedures by not having a countersignature and send it – twice.
This isn’t the first rodeo for the official, whose
name I don’t mention to spare her the embarrassment. She’s been in that job for
a number of years. One might see where somebody relatively unsophisticated in
the ways of the world could fall for something like this. It’s almost
inconceivable that a veteran in the world of finance would.
So, one must wonder about the corporate culture at
EBRPSS that could create an atmosphere where a high-ranking but apparently
gullible employee could get taken in. Is it because not much in the way of
market forces exist to encourage care in procedures when oceans of money for
operating expenses – in the neighborhood
of $600 million a year in local and federal tax dollars and revenue-sharing
from the state – pour into the organization regardless of its performance? And
that being a performance
graded by the state as mediocre?
Accidents do happen and in the end, through
clawback and insurance, the thieves got “only” $10,000. Still, it’s taxpayer
dollars wasted, and a subsequent audit of the event showed this entity with thousands
of employees and hundreds of millions of dollars flowing through it annually
needed better procedures to obviate this vulnerability.
Perhaps something else unlikely to have appeared
in the report could help – more competition encouraged by laws creating
incentives for private schools and charter schools. That might divert education
dollars from an untrustworthy system towards others subject to market
discipline that makes them less likely to commit such follies, and put pressure
on that system to reduce the chances of something like this again.
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