Print Story Email Story Ethics questions follow P'ville BOE dealings By JOHN FROONJIAN Published: Sunday, April 8, 2007 State taxpayers send $65 million a year in school aid to Pleasantville to offset the city's poverty and to improve low student test scores. The financially mismanaged system has burned through 10 superintendents in 10 years. A state monitor has been appointed to oversee the district.
But district insurance contracts that benefit school board members, family and friends as well as school employees are the subject that commands much of the board leadership's attention. Insurance contracts are at the heart of what appears to be multiple violations of state ethics laws.
A Press of Atlantic City investigation of board insurance contracts reveals a too-cozy relationship between board leaders aligned with corrupt politician Craig Callaway's organization and certain contractors. Former Atlantic City Council President Callaway went to prison last month for a bribery conviction, but family members and supporters remain in positions of power in Pleasantville and Atlantic City.
The Press found that in Pleasantville, school board contracts, political fundraising and private jobs are intertwined. The process has produced apparent conflicts of interest, possible violations of the state's pay-to-play law, defiance of election-finance laws and potential violations of the federal law designed to protect personal medical information.
There are several players in the drama. But Board President Jayson G. Adams and insurance businessman John N. D'Angelo III of Egg Harbor Township are at the center of much of the activity.
n  Adams sought campaign funding for Callaway-backed candidates during the 2006 school board election from D'Angelo's firm while it was under contract with the board. Adams' team was helped through roundabout dealings that went unreported.
n  Adams asked D'Angelo to help land him a job while the D'Angelo firm was doing business with the board. D'Angelo and Adams' employer later pursued a joint business venture.
n  Adams ordered school board workers to fax dozens of pages of school district insurance information to D'Angelo's fax machines. Adams also released health-benefits information to D'Angelo's company. This all occurred a month before the company received the district's health-benefits contract.
n  The board's Callaway allies pushed last summer to hire a roofing contractor without going to bid. The chairman of that company, Aetna Roofing of Trenton, later hired Adams and D'Angelo at another company the Aetna Roofing company runs.
Also, former board member Pete Callaway, Craig's brother, voted to give a contract to a company that was paying another brother, Ron, as a consultant.
The web of dealings provides a possible explanation why Pleasantville school board records are routinely lost, erased or simply not kept. A Press lawsuit to obtain meeting records showed the board kept no written records of closed-door meetings in which contracts were discussed. Tape recordings of many of those meetings were found to be missing or erased.
Taxpayers have little to show for the hundreds of millions of dollars spent in Pleasantville. The district is designated a poor school system in need of extra help. State aid funds two-thirds of its budget.
Fourth-grade language scores were in the bottom 1 percent, while math scores ranked among the worst 3 percent. High school scores were in the bottom 5 and 6 percent for language and math.
On Feb. 28, 2006, the Pleasantville school board voted to contract with DB&H Capital Investments, a Connecticut benefits-enrollment company, to offer life and other types of voluntary insurance to district employees.
Board records misidentified the contractor as DG&B Capital Investments, a company not found on the Internet, in Securities and Exchange Commission filings or major business directories. No matter. School board leaders knew with whom they were dealing.
For the next three months, the district did business with M3 Benefits Communication Services, which is owned by DB&H. Communications to the board clearly identified the company as DB&H. John D'Angelo, then chief officer of M3, gave DB&H materials to the board when he pitched the contract during the Feb. 28 meeting.
And some Callaway team board members met with M3 officials at the firm's Delilah Road office in Egg Harbor Township on Sunday, Jan. 8, 2006, to discuss the contract in advance, according to a company source who asked not to be identified.
Adams, Board Vice President James Pressley and then-board member Pete Callaway reportedly met with D'Angelo, Craig Callaway and others. Also attending was another Callaway brother, Ron, a $500-a-week consultant for DB&H/M3 since June 2005, records show. His job was to introduce potential clients.
Pete Callaway voted to award the insurance contract to his brother's employer, board records show. Pete Callaway, now a Pleasantville councilman, told The Press he didn't recall the M3 office meeting and didn't know his brother worked as a consultant.
The day after the contract was awarded, an M3 employee e-mailed the district asking for benefits information and citing Ron Callaway as a reference.
In a March 30, 2006, e-mail obtained by The Press, Adams told D'Angelo that an M3 employee named Krista had found them a campaign headquarters site — typically the kind of work done by campaign staff.
D'Angelo wrote back the next day, saying Krista had “contacted Pete's wife in creating a strategy.� He told Adams that DB&H/M3 could not make financial contributions. A company official told The Press that DB&H's partners, becoming leery of rumors of political fundraising, had just directed all employees and partners not to make political contributions.
“We can, however, help with strategy and give access to our supporters for fundraising and support of the club,� D'Angelo wrote to Adams.
On April 14, 2006, a full-page ad promoting three Callaway-supported school board candidates and attacking opponent Jerome Page ran in The Press. Roy Paul Winkworth, a salesman with RSC Financial Products of Summit, N.J, paid for the $2,264 ad. RSC is part of R. Seelaus & Co., a multi-state investment company.
Winkworth said he had no interest in the school board election. He said D'Angelo, a family friend, asked him to pay for the ad and that D'Angelo would pay him back. Winkworth took the ad out under the name Paul Seelaus and charged it to his mother's credit card, records show. Winkworth said he considered the arrangement a loan. D'Angelo paid back most of the money, but not all.
The ad said it was “Paid for by Concerned Citizens of Pleasantville.� The N.J. Election Law Enforcement Commission and Atlantic County Clerk's office have no records of such a group or of the expenditure being reported.
After the school board election, D'Angelo allegedly told M3 employee Krista Virasingh to put the costs of a fundraiser for the Callaways' Real Democratic Club of Pleasantville on her personal credit card, according to two high-ranking DB&H/M3 officials and company records obtained by The Press. Virasingh bitterly claimed to DB&H that D'Angelo promised she would be repaid, according to the sources.
However, DB&H refused to reimburse the worker for the $1,062 in costs she incurred, said a company official who asked not to be identified. One company source said money was paid back indirectly. The company official denied it. A contribution from Virasingh was not reported on any Pleasantville school candidate finance statements. Virasingh did not respond to multiple requests for comment.
Adams told a reporter there was “some dialogue� about M3 providing campaign funding. He said he didn't seek it, that D'Angelo raised the subject and made the offer. Adams said he does not believe he violated campaign or ethics laws because he was not running for office and the headquarters fell through.
The DB&H official said the investors lost money on the Pleasantville contract because so few district employees signed up for insurance. He said the investors were unhappy with D'Angelo's political maneuvers and that Virasingh was simply following D'Angelo's orders. By June, a DB&H partner escorted D'Angelo out of the M3 office and D'Angelo was told not to come back, the official said.
D'Angelo wasn't out of work long. Winkworth introduced him to his boss at RSC Financial Products, August Cellitti. Winkworth said he thought RSC could take advantage of D'Angelo's contacts and do business in Pleasantville, and D'Angelo was hired.
He said Winkworth would introduce him to Cellitti at RSC Financial Products. A meeting took place around mid-summer. Adams said he provided a resume. But Winkworth said Cellitti didn't hire Adams because he worried about the legality.
On Sept. 12, Adams voted to give the board's health-benefits contract to the company where he had sought employment. The school board replaced Corporate Employee Benefits with RSC Financial Products. Adams would later pursue a joint business venture with RSC.
Adams had helped RSC even before the Sept. 12 vote. School board records show that district employees faxed 32 pages of “insurance data� to Adams on Aug. 7. It was faxed to the number D'Angelo had given out as his personal fax number. On Aug. 14, the district faxed 24 more pages of “insurance data� to Adams at D'Angelo's RSC office in Smithville.
And on Aug. 23, Adams signed an order authorizing the district's health-coverage provider, Horizon Blue Cross/Blue Shield, to release benefit-plan information to RSC Financial Products and Bollinger Inc., which was to provide prescription benefits. According to the order, the information included claims data, rates, renewal notices and other potentially sensitive information.
Adams said he did not recall receiving faxed information or signing the release authorization. He said if he did sign it, he was simply trying to see if RSC could save the district money.
The RSC contract, which called for a $4-per-employee weekly fee, caused a political uproar. On Oct. 24, a board majority canceled the RSC contract and reinstated Curtis Lackland and Corporate Employee Benefits.
RSC officials did not respond to a request for comment. But a company source who didn't want to be identified said D'Angelo was let go in January.
There is no official record of when Adams took a position with Coastal Solutions LLC. But during the second half of 2006, he joined the company — which is owned by a contractor who sought to do business with the school board.
Bruce Begg is chief executive officer of Aetna Roofing of Trenton. In July, Aetna Roofing sought a contract to inspect the roofs of school district buildings, according to district sources who said board Vice President Pressley promoted the deal.
Begg formed Coastal Solutions in August and hired Adams at some point. Coastal initially operated out of the same address as Aetna Roofing, incorporation records show.
Adams said he joined Coastal Solutions in late September or October, within a few weeks of approving the health-insurance contract for RSC. Though D'Angelo worked for RSC, he also signed on with Coastal as a management adviser who was part of its executive team, according to a company Web site posted in late 2006.
By the end of the year, RSC was using Coastal, an insurance-benefits and enrollment company, to jointly pursue work in the city of Passaic. Adams was working for one contractor who had sought a board contract and working with another who did have a contract with the board.
But an early version of the Coastal Solutions Web site listed both D'Angelo and Adams as part of its “executive team.� It identified Adams as vice president of political affairs and new business development. A voice mailbox for Adams is still active at the business, which is now based in Egg Harbor Township, according to the current Web site.
Adams said he never knew he was listed as a Coastal executive or that he even had voice mail there. He said he did not believe working for a businessman who wanted a board contract created a conflict of interest. He said Begg recruited him. He said he didn't personally gain anything and never directly worked for anyone contracting with the district.
In fact, he said, he gave up a potential job with RSC Financial Products because he believed RSC would save the district money. But it couldn't do business if he worked there.
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