Three former ASU employees and a former Arizona superintendent were indicted on a total of 27 felony counts for possibly violating state procurement laws relating to a development services contract with Higley Unified School District, as well as filing false returns, according to a report from the Arizona Auditor General made public July 22.
Gary Aller, former director of the ASU Alliance for Construction Excellence, and Steven Nielsen, former assistant vice president of ASU's University Real Estate Development, were each indicted on three felony counts related to fraudulent schemes and practices, fraudulent schemes and artifices, and conspiracy.
Kay Hartwell Hunnicutt, a former ASU professor and Mesa attorney, was indicted on three felony counts related to filing a false return.
Denise Birdwell, superintendent of Higley Unified School District from 2009 to 2015 and superintendent of Scottsdale Unified School District from 2016 to 2018, was indicted on 18 felony counts and was the primary beneficiary of the scheme, according to the report.
Aller and Nielsen did not return multiple calls from The State Press requesting comment. Hartwell Hunnicutt will be pleading not guilty, said Hartwell Hunnicutt's attorney, Melanie Laboy.
In 2012, Higley USD planned to build two new middle schools, and as the district was near its debt limit, it issued a request for proposal to contract a private developer.
Aller and Nielsen created Educational Facilities Development Services LLC just two weeks before Higley issued their request for proposal. The group was eventually awarded the contract totaling $2.5 million in July 2012, involving an alternative financing structure using lease-purchase agreements, a nonprofit corporation and a limited liability company.
According to the report, staff at Higley provided materials exclusively to Aller and Nielsen to help EFDS secure the contract. EFDS reportedly received site plans, architectural specifications and proposal drafts from the staff, allowing the group to influence the proposal's requirements.
Brian Robichaux, former president of Hunt & Caraway Architects Ltd., also received materials related to the proposal. He was a member of EFDS’ development team, and his company was contracted with EFDS to receive over $3 million for "Project work," according to the report. Robichaux, who died in 2020, is not named in the report.
Birdwell, Aller and Nielsen also reportedly falsely certified documents claiming to have followed the school district's rules in securing the contract, according to the report.
Aller retired from his University position in 2013, but Nielsen continued working in his position for two more years after the proposal was made, according to a University spokesperson. Hartwell Hunnicutt left ASU in 2010.
In November 2012, voters struck down a bond for the district that was intended to pay for the project. In response, Birdwell reportedly misspent $6 million of Adjacent Ways Fund money to finance the project. The Adjacent Ways Fund money is restricted by state law to only be used in "improving public ways adjacent to land owned or leased by a school district," the report said.
From 2014 to 2016, Birdwell also received a total of $105,500 from Hunt & Caraway, Robichaux’s personal bank accounts and CORE Construction, a Higley vendor associated with EFDS. According to the report, Birdwell denied having ever received money from any Higley or Scottsdale vendors.
A $43,000 portion Birdwell received was paid to Hartwell Hunnicutt or the "Law Offices of Kay Hunnicutt" in several checks, which were deposited into a joint checking account Birdwell and Hartwell Hunnicutt shared, according to the report. Birdwell expended the money within a few weeks of each deposit.
One of the checks paid to Hartwell Hunnicutt had "consultation retainer" in the memo. Neither Birdwell nor Hartwell Hunnicutt claimed the sums on their tax returns, nor could they produce supporting documents regarding the purpose of the checks, according to the report.
Birdwell and Hartwell Hunnicutt had personal and professional connections including sharing the previously mentioned joint checking account, naming each other as the only beneficiaries on a personal bank account, co-owning a timeshare and sharing a home, among others.
Hartwell Hunnicutt also received $520,260 from Hunt & Caraway, and only $191,362 of that total was supported by contracts and invoices.
Aller, Nielsen, Birdwell and Hartwell Hunnicutt are scheduled for arraignment hearings on Aug. 11.
Reach the reporter at alcamp12@asu.edu and follow @Anna_Lee_Camp on Twitter.
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