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Former EPISD Superintendent Cabrera didn’t disclose son’s employment with district vendor

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A former El Paso Independent School District superintendent who resigned abruptly last year amid a civil lawsuit did not disclose that his son worked for an investment advisory firm the district hired during his tenure, a recent audit found.

The new findings could affect whether EPISD chooses to renew the contract with the firm, Trusted Capital Group Advisory Services LLC, even though former Superintendent Juan Cabrera resigned Nov. 5, 2020.

The latest internal audit comes on the heels of a separate audit that found “an appearance of conflict of interest” between Cabrera and various contracted academic services vendors. Shortly before that audit’s release, the deputy superintendent of finance and operations, Carmen Arrieta-Candelaria, alerted the chief internal auditor about a potential conflict of interest between Cabrera and TCG, according to the audit report published Monday.

EPISD entered into a one-year, $42,500 contract with TCG beginning Oct. 1, 2020, with the option for two annual renewals. TCG was contracted to help EPISD diversify its investment portfolios and provide support to the district’s treasury department. The district has worked with the firm for 15 years, the audit notes.

Neither Juan Cabrera nor TCG filed conflict of interest disclosures prior to entering into the contract notifying district staff that Cabrera’s son was a TCG employee.

Eduardo Cabrera was a paid intern with TCG from May 2019 through May 2020. He was promoted to an institutional sales associate position in their Austin office in August 2020 after completing a four-month long training program, according to his LinkedIn profile.

Conflict disclosures are required by state law. Cabrera last filed one in 2017, a previous audit found.

Neither Cabrera nor TCG officials have responded to a request for comment.

In response to questions from the auditors, Cabrera said he was aware his son had an internship, but it’s unclear whether he knew with what company. “I am not sure when he was offered employment as he did not live at home. I believe I was in the process of leaving the district, but do not recall timing,” Cabrera said.

Arrieta-Candelaria became aware of Eduardo Cabrera’s employment around May 3, according to the audit, at which point she reported it to the auditors.

Auditors were unable to determine “who identified the need for the investment advisory services contract” due to “conflicting information.”

Cabrera, Arrieta-Candelaria and TCG staff met in July 2020, according to the audit. EPISD Treasurer Walt Byers told audit staff Arrieta-Candelaria informed him in August that Cabrera “wanted to pursue the contract,” while she told auditors she was the one who identified the need for the services. Cabrera said he asked EPISD’s finance team “to look at the program and only bring it to (him) if they could not do better with the funds.”

The decision to hire TCG was made without factoring in Cabrera’s “wishes,” Byers told auditors. TCG’s investment recommendations have led EPISD to earn a profit of $16,000, he further said.

The EPISD Board of Trustees approved TCG as an investment advisor on Sept. 10, 2020. The meeting agenda noted the district had received a proposal from the firm and was finalizing an agreement for investment advisory services.

The audit does not mention this board action. Chief Internal Auditor Mayra Martinez, via district spokesperson Melissa Martinez, said the detail was not included because it was not relevant to the audit scope and objectives.

EPISD’s procurement department added TCG as a new vendor on Oct. 16, 2020 despite knowing the company had yet to submit the required conflict disclosure statement, the audit notes. Staff never followed up with the company to obtain the statement.

Arrieta-Candelaria has been on paid administrative leave since May 10. It’s unknown why she is on leave, as the district has refused to comment beyond calling it a “personnel matter.”

Asked to comment on the audit, Arrieta-Candelaria provided the following statement via her attorney, Lynn Coyle: “This confirms what has always been the case — that Ms. Arrieta should be actively engaged in her duties as the district’s Deputy Superintendent for Finance and Operations. She is anxious to serve the students, parents and teachers of the district as the new year has already begun.”

The audit recommends Byers conduct a needs assessment or business analysis to help interim Superintendent Vince Sheffield determine whether EPISD should renew TCG’s contract. It further recommends that EPISD’s attorney and Executive Director of Procurement and School Resources Ron Gatlin “determine the consequences, if any,” for Cabrera and TCG’s failure to disclose the conflict of interest.

Cover photo: Juan Cabrera, then superintendent of El Paso Independent School District, spoke at the EPISD teacher of the year gala in 2019. (Photo courtesy of El Paso Independent School District)

Disclosure: Carmen Arrieta-Candelaria and Lynn Coyle are financial supporters of El Paso Matters.

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Molly Smith

Molly Smith has been a reporter for the El Paso Times and The (McAllen) Monitor. She’s covered education, criminal justice and local government. A Seattle native, she’s lived in Texas since 2014, with stops in Austin, the Rio Grande Valley and now El Paso. She can be reached at mksmith@elpasomatters.org or 915-247-8857.

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