Allegations of conflicts of interest with developer and board member Carl Paladino have mounted over the past couple months, given his company's charter school property holdings. At the Nov. 5 school board meeting, this issue came to a head with the board slated to vote on the settlement of a lawsuit involving Charter School for Applied Technologies.
In 2009, the district ended student busing for CSAT because it was located just over the city line in Kenmore. That prompted CSAT to sue the district on a variety of grounds. Board member Larry Quinn led the effort to settle the suit after a judge set potential damages at $6.7 million if the legal matter moved forward and judgment was reached against the district.
Ultimately, CSAT and the district agreed that the district would pay $200,000 to CSAT, but the district would only drop off students on the Buffalo side of Kenmore Avenue. CSAT would pay the costs associated with building a bus shelter for students on the Buffalo side of the street. In addition, CSAT agreed to pick up the district share of all busing transportation costs that were not reimbursed by the state and assume liability for any claims against the district for CSAT transportation issues.
Five members of the board majority (which includes Paladino) were in favor of the settlement agreement, and four members of the board minority were against. This made the question of Paladino's voting legitimacy important. The lawyer in charge of handling the CSAT suit on the district's behalf, James Milbrand, initially stated Paladino had a conflict of interest because of his company's ownership of the current CSAT property. However, Paladino later clarified that the property was held in a trust for his children and that he had no direct financial interest. He later further changed the ownership arrangement so that his adult son had sole ownership of the property.
As a result, both Milbrand and outside district lawyer Karl Kristoff both agreed that Paladino had no conflict of interest. After more board disagreement over how and when these lawyers opinions should be publicly released, they were finally released on Wednesday. Here they are below: