The Tucson Unified School District is being investigated by federal and state officials for wide-ranging problems in its technology department — and has lost multiple opportunities at tens of millions of dollars in federal aid as a result.

Authorities declined to discuss the investigations, but TUSD's problems are evident: Students have slow Web access on school computers, and the technology department is without a director or a coherent technology plan for the future. And — as long as the shadow of the investigations hangs over TUSD — there's little chance the district can obtain federal money to solve the problems.

"I don't think any of the turmoil is affecting students," TUSD Superintendent Roger Pfeuffer said. But he admitted TUSD's infrastructure and computer network need improvement, and the current problems could have big effects in the future. "The longer we put it off, the more it will affect students."

The turmoil began in 2004, when TUSD officials applied for federal funds to upgrade the district's computer network and phone system.

Not long afterward, employees in the technology department secretly alerted authorities, concerned that the millions of dollars in contracts would go to a small, local company instead of the major national corporations with which the district previously had contracted.

The employees also were concerned the company may have received special treatment because of a friendship between its president and TUSD's technology director.

Two years later, TUSD's Governing Board asked the Arizona Attorney General's Office to investigate the department, citing concerns of possible bid-rigging by a paid consultant.

Hundreds of pages of records obtained by the Arizona Daily Star, many through public records requests, along with dozens of interviews and months of investigation, paint a picture of a department in distress and under deep scrutiny.

Since federal funds for technology improvement — E-Rate funds — became available in 1998, TUSD has had problems obtaining them, and hasn't received any since 2002. In that time, more than $6.2 billion has been disbursed nationwide.

Despite the investigations, TUSD continues to apply for the federal funds — because there's no other single source with that much money to give.

State education officials say the investigations hurt TUSD's chances but that it's still possible the district could receive funds, as long as all application rules are followed.

"The 2007-2008 application from TUSD would get reviewed just like all the other applications submitted this year," wrote Cathy J. Poplin, director of educational technology for the Arizona Department of Education. "However, final approval will depend on where the investigation is at."

E-Rate protocol

In March 2004, two TUSD Technology and Telecommunication Services (TTS) employees independently called the federal whistle-blower hotline, concerned with how district officials planned to use the federal funds they were seeking.

The E-Rate funds are administered by the Federal Communications Commission and are designed to give discounts to schools and libraries for telecommunications and Internet access. Those that apply for funds must already have picked vendors to perform the services detailed in the application.

TUSD requested nearly $16 million in 2004 for 41 services, FCC records show.

Thirty-five of those service contracts — totaling more than $10 million — were awarded to NVision Networking Inc., an eight-person technology company in Tucson that also was TUSD's E-Rate consultant that year. Some TTS employees said the contracts are inappropriate given NVision's consulting role.

NVision had worked with TUSD in the past, employees and TUSD records said. In 2003, TUSD awarded NVision $2.5 million for E-Rate services, though the money was never received because the government denied TUSD funding that year.

However, TTS employees were concerned about possible preferential treatment of NVision because of the relationship between its president, Dan Meyer, and TUSD's TTS director, Guyton Campbell. Campbell quietly resigned from his $93,000-a-year job in January.

"NVision (was) allowed access to director, manager, and schools during E-Rate proceeding not provided to other vendors," states a TTS memo obtained by the Star. The unsigned memo contains a list of concerns submitted in May 2004 to Superintendent Pfeuffer and TUSD's governing board. "Password to restricted district data on the Schools and Library E-Rate proceeding was provided to one contractor, NVision."

An e-mail obtained by the Star shows then-TTS manager Mary Veres shared an internal password with Meyer and an NVision co-worker. In it, she invites them to "look at what I've done so far" and concludes: "Any and all advice would be appreciated."

Sharing the code with a potential vendor violates E-Rate protocol. The e-mail also indicates the contract was arranged before the federally imposed bidding period ended, which the FCC noted in its explanation of why TUSD was denied funding.

Fractured department

Most alarming to TTS employees was the relationship between Campbell and Meyer.

"I have been friends with Guyton for many years," Meyer said when contacted by the Star in late February.

Meyer said the two worked together, as vendor and school technology director, when Campbell worked at the Arizona State Schools for the Deaf and the Blind as well as the Sunnyside Unified School District. Before that, Meyer recalled, the two set up a computer lab for a University of Arizona satellite campus.

On Jan. 19, Campbell submitted a two-page resignation letter, obtained by the Star via a public-records request. He wrote he'd been "the subject of various investigations for alleged issues arising out of the performance of my defined job and performing tasks that were assigned to me by my superiors."

The Star made more than a dozen attempts to contact Campbell, at his home, through all listed phone numbers, via TUSD officials and neighbors, and even the real-estate agency where he now hangs his license. A certified letter with written questions was sent to his home as well. He didn't respond.

Campbell's resignation letter reads: "My employer is attempting to eliminate me as an employee" because Campbell had "apparently offended an 'outside force' that enjoys a particularly cozy and profitable financial relationship with the district."

He concluded: "It would appear justifiable that TUSD consider fair compensation for what has transpired. I will await your reply."

The letter never identifies the "outside force."

When Campbell arrived at TUSD in late 2003, he'd been lauded for his work. But suspicions also followed him.

While at Sunnyside, he received the Computerworld Smithsonian Award and was honored alongside Stanford University and Harvard University Medical Center.

He'd gone on to spend four years at the Schools for the Deaf and the Blind. But the same month he left ASDB, the school received a $3,000 check, described in records as a donation, from a Florida software company for furniture for ASDB's Information Technologies Department. Thirteen months later, on the advice of the state Attorney General's Office, ASDB returned the check, an ASDB board member says. It isn't clear, though, if Campbell knew about the money.

Visions of a wireless network

Internal memos and a federal mediation report obtained by the Star show TUSD's TTS department became fractured under his leadership. Employees said Campbell didn't detail to them his vision for the network's future and they were concerned that his plan was financially irresponsible.

Campbell's vision was to scrap TUSD's current network and create a wireless network spanning the district's 250 square miles. The ambitious project would have cost more than $50 million, current and former TTS employees say.

Officials say the idea for a wireless computer network was approved by voters, as part of 2004's $250 million bond issue. About $8 million of that would have gone to the wireless computer network.

But Campbell needed more support, and administrators accuse him of staging a campaign to discredit the existing system. Last year, TUSD's governing board applied for E-Rate money because members were told public safety hinged on it.

Pfeuffer and board members were told by Campbell and an outside consultant that TUSD's 911 system was defective, and that if someone at a school called 911, emergency responders would arrive at TUSD's headquarters at 1010 E. 10th St.

"That isn't accurate," Pfeuffer said in January.

Though there were problems with the system that caused some emergency responders to head to TUSD headquarters, the problems were nowhere near the systemic breakdown Campbell and TUSD's 2006 E-Rate consultant described. That consultant's recommendations are being investigated by the Attorney General's Office, too.

Pfeuffer admits that along with TUSD's alleged 911 problem, administrators and TUSD's Governing Board were never apprised of the various options to upgrade TUSD computer network and phone system.

"There were people who thought it was probably advantageous to simply, and I say simply and relatively cheaply, upgrade our current phone system," he said. "There were others that said the future is not in that kind of phone system. The future is in Voice over Internet Protocol."

Voice over Internet Protocol means replacing phone lines with a Web-based service, and, in this case, according to TUSD records, a wireless network.

That's what Campbell recommended, Pfeuffer said.

Audit pushes policy changes

At least a dozen TUSD employees have been interviewed by federal and state investigators. TUSD has conducted three internal investigations. And an outside audit found problems with TTS procurement policies, including the fact that TUSD's purchasing department was out of the loop.

In December 2004, investigators for the U.S. Department of Justice's San Francisco office interviewed two TTS staffers.

"Some staff has spoken to federal officials," Pfeuffer said, but not for some time. "We know nothing about what's going on there."

Owen Clements, chief of special litigation for the city of San Francisco Attorney's Office, said that could be by design.

Though he's not connected to this case, his office was involved in a massive, nationwide E-Rate investigation that began in 2000. He said a federal statute called the False Claims Act lets anyone who discovers fraud involving federal funds file a civil complaint. The complaint is sealed during the investigation so the government can build its case and consider civil penalties or criminal charges.

Luke Macaulay, spokesman for the U.S. attorney's San Francisco office, declined to comment, and referred questions to Department of Justice's antitrust division in Washington, D.C. A spokeswoman there declined to comment as well.

Rudy Flores, TUSD's executive director of engineering and facilities, was interviewed under oath by the state Attorney General's Office in October. Flores was assistant director of TTS under Campbell from July 2005 to July 2006.

Though he said he'd twice been interviewed by investigators, he wouldn't disclose whether they were federal or state. "I'm not supposed to mention anything about any of that," he said.

Mary Veres, currently TUSD's interim-TTS director, also was interviewed. She also would not talk about the case.

When shown the e-mail in which she gave NVision internal passwords, she said: "I would love to discuss this with you because I think there's a lot of misinformation. But I don't feel like I should be doing it because the investigation is still going on."

A 2005 audit of TUSD, by Heinfeld, Meech & Co., TUSD's auditors, found that the 2004 E-Rate application was handled by TTS, not TUSD's purchasing department, and, therefore, wasn't subject to proper oversight. The report also stated that TTS had few records of its 2004 E-Rate application.

The audit said the problems didn't merit notifying federal officials, but it recommended a significant policy change:

"All future request for proposals for E-rate services should be made through the Purchasing Department, where internal controls, purchasing procedures, and knowledge of applicable compliance requirements will help ensure all of the district's procurements are in compliance with the Arizona school district rules."

It could be months, if not years, before the federal and state investigations conclude.

The San Francisco City Attorney's Office took until 2004 to conclude its E-Rate investigation. In 2005, a federal grand jury returned a 22-count indictment against six companies and five people on charges of fraud, collusion, aiding and abetting and conspiracy. Two companies paid more than $20 million to settle the civil claims brought by the U.S. government.

"We've missed the boat"

Until contacted for this story, TUSD Governing Board member Judy Burns said she'd only heard rumors of a federal investigation. "The district is going to suffer and the students in class will suffer for not doing this in a legitimate, businesslike way," she said.

On Jan. 30, TUSD's governing board voted to apply for E-Rate funds for 2007. Absent from the meeting was Campbell, whose resignation had become official one week earlier. There was no public mention of his departure.

A new committee has been charged with writing a new technology plan for the district that likely will include various options to improve TUSD's network and phone system.

A plan that details technological improvements for teaching and classroom education does exist, but there's no plan for how TUSD will increase its bandwidth and provide classroom computers with the Web access expected of such a large district in the digital age.

In 2006, TUSD's governing board voted to apply for E-Rate funds with the caveat that the Attorney General's Office investigate whether procurement policies were followed. There were concerns about the consultant used that year, Jon Slaughter, and possible links to a vendor he'd recommended for a contract. At the time, Slaughter said his recommendations weren't influenced by any vendors, even though an ad for the company he recommended was on his Web site at the time.

Pfeuffer and the Governing Board expected a quick investigation. It's lasted more than a year.

In June, with no word from state investigators, TUSD withdrew its 2006 E-Rate application. Pfeuffer said district officials don't expect any 2006 funds.

"We've missed the boat here," Burns said. "We've missed many opportunities."

●Contact reporter George B. Sánchez at 573-4195 or at gsanchez@azstarnet.com.