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May 2006
Schrenko under cross: Temple was “the Puppet Master”
The Atlanta Journal-Constitution
Former State School Superintendent, Linda Schrenko, who pleaded guily Wednesday to money laundering and embezzling to finance her failed campaign for governor, testifed Thursday as part of her plea deal with the government.
Most of her testimony was aimed at Merle Temple, her former deputy superintendent and lover, who was charged late Thursday with obstruction of justice for allegedly planning to protect Schrenko when he testified against her.
Schrenko said she and Temple took cash to various people to get them to write campaign checks, including her mother, her daughter, and state Rep. Sue Burmeister of Augusta.
Contacted by telephone Thursday afternoon, Burmeister said: “I wrote two checks out of my personal account that I gave to her campaign. And I have just been served a subpoena to testify. I haven’t seen it yet. It was delivered to my office. So at this point, I feel I probably cannot comment. Linda personally did not give me money.”
When asked if Temple did, she said, “I probably can’t comment because I haven’t talked to anybody.”
Campaign disclosure reports filed by Schrenko’s campaign show Burmeister wrote campaign two checks, one on Dec. 31, 2001 for $150 and one on June 29, 2002 for $250.
Under cross examination Thursday afternoon, Schrenko testified that Temple called himself “the Puppet Master,” because he worked behind the scenes on her campaign and thought he was largely in control of the state Department of Education.
Temple was a former law enforcement officer and spokesman for Bell South in the Augusta area before Shrenko brought him in as a deputy state school superintendent, she said.
During her tenure, Schrenko said she controlled a $7 billion annual budget. But on several occasions, she said, Temple asked her sign documents she didn’t think she had authority to sign. Schrenko testified she once signed a $4,500 contract but didn’t know what it was for, at Temple’s request.
During her gubernational campaign, with her health bad, her finances “abysmal” and with a poor showing in the polls, Schrenko said she considered dropping out of the race. “I think I spent every night crying for hours,” she said. “I was ready to just go home. It was hurting me physically.”
Botes recommended she take vitamins, she testified.
But Temple and her original campaign manager talked her into staying in the race, she said. That’s when she said Temple told her he’d put the commissions he earned from Botes’ computer company and some of his own retirement money into her campaign.
She said that after she and Temple learned in 2004 they were under federal investigation, Temple insisted they go to see Botes. The three met at a Buckhead pub, she said, and Temple hugged Botes.
“Merle’s not a hugger,” Schrenko said, but he joked that he was checking Botes for a wire. “Mr. Botes said he was wearing tennis clothes and had noplace to hide a wire,” she said.
Botes and Temple, she said, were both afraid the federal government would tap their telephones.
After Temple made a deal with the government last year to testify against her, Schrenko said he continued to call, email, visit and bring her presents. She said the government warned him to stop doing that and, for three weeks, she said he did. Then he began calling and visiting again, she testified. “Temple told me that, according to his plea aggrement, he wasn’t supposed to have any contact with me whatsoever.”
Schrenko said Temple told her believed he would get a two-year probated sentence plus community service for his part of the embezzelment and money laundering scheme. He later told her he’d get a third of whatever sentence she got, she said.
Staff writer Nancy Badertscher contributed to this story.
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Schrenko’s first testimony: Aide steered the deal
The Atlanta Journal-Constitution
Former state School Superintendent Linda Schrenko, who pleaded guilty Wednesday to embezzlement and money laundering, testified Thursday morning against her former deputy superintendent and lover, Merle Temple.
Schrenko said Temple devised the scheme to funnel illegal money into her 2002 gubernatorial campaign and guided the process every step of the way.
Schrenko said it was Temple’s idea to have the Department of Education cut 11 checks for just under $50,000 to the Atlanta computer company of Stephan Botes, a South African national and millionaire whom prosecutors say hoped to get a major contract with the school system in return for making illegal contributions to Schrenko’s campaign.
The checks were officially earmarked for Botes’ company to produce software that would benefit deaf and honors students, she said.
Schrenko, who looked directly at the jury and spoke passionately when she talked of the planned educational programs, said she thought the company would produce the software eventually.
“The schools for the deaf and blind are schools that rarely get anything extra, Schrenko told the jury.
Government prosecutor Russell Vineyard asked: “Was that your motivation, Ms. Schrenko?”
She replied, “In part, but I also knew Merle would get a commission on it. I knew whatever commission came to Merle, he would put in my campaign.
In the summer of 2002, Shrenko said Temple resigned as her deputy to go to work for Botes’ company. Temple promised he’d give Shrenko the majority of the commissions he earned for her campaign, she testified.
Schrenko admitted she did not have the authority to issue the checks without following protocol but said Temple convinced her it would take too long to go through the usual channels.
In return, Schrenko said, Temple asked her to sign a $2.5 million contract with Botes’ company. She said she never actually signed the contract, which was stamped with her signature, instead of signed.
Botes and a former employee, Peter Steyn, are co-defendants in the federal corruption trial, now in its second week. During opening statements last week, Botes’ attorney claimed any deals with Schrenko and Temple were done by his underlings.
But Schrenko said she and her female assistant spent the night at Botes’ home in Country Club of the South the night before a March 2002 breakfast fundraiser the computer executive held for her. Many of the 30 to 40 people who attended were not U. S. citizens and would not have been eligible to vote, she said.
“I kind of wondered wondered why, if I couldn’t get their votes, they would be interested in my campaign for governor,” Schrenko testified.
Schrenko said she and Temple also spent a night alone at Botes’ home before another fundraiser at Country Club of the South in the summer of 2002.
Schrenko seemed relaxed on the witness stand, speaking softly and often smiling at the jury.
After she pleaded guilty on Wednesday, Temple, who was scheduled to testify against her in return for a lighter sentence, was charged with obstruction of justice.
Prosecutors produced a tape-recorded telephone conversation between Schrenko and Temple on May 2 in which he offered to leave damaging information about her out of his testimony, as long as her attorney protected him.
Recording telephone conversations is legal in Georgia as long as one of the parties agrees to it, indicating Schrenko’s participation in the taping factored in the new charges against Temple.
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Schrenko pleads guilty
The Atlanta Journal-Constitution
Former State School Superintendent Linda Schrenko pleaded guilty this morning to defrauding the government and money laundering.
She has been sentenced to eight years in prison and is waiving her right to appeal. She faced a maximum 25 years on the charges.
Part of her sentence requires her to participate with the government in the prosecution of her co-defendants, A. Stephan Botes and Peter Steyn, and hand over any evidence against them. She will also be required to make full restitution, regardless of her finances.
Schrenko has also agreed to make a full accounting of her assets, which include a 1999 Toyota.
On July 12, U.S. District Court Judge Clarence Cooper will review a pre-sentence report and decide how much restitution Schrenko must pay. The judge could also make a recommenation to the federal Bureau of Prisons about where Schrenko will serve her time.
Schrenko’s attorney, Pete Theodicion, had said that neither he nor his client would comment until after sentencing as reporters followed them as they left the courthouse this afternoon. But when a reporter asked Schrenko if she was at peace with her decision, she paused and replied: “yes.”
During sentencing, Cooper asked her whether she was under a doctor’s care and if she was taking any medication.
Schrenko laughed.
“A long list of things,” she said, explaining that she is taking 12 to15 different medications, including drugs for sleep apnea, narcolepsy, a heart condition and a back problem, circulatory and pulmonary problems and osteoporosis. She is also taking anti-depressants and a tranquilizer, she said.
Schrenko said she’d been seeing a psychiatrist since 2003 “when all of this came up.”
Cooper asked her if she understood that she would not be paroled. Schrenko said she did.
Schrenko was on trial with Botes, a computer millionaire and South African national, and Steyn, his former chief operating officer, for a conspiracy to defraud the government of $600,000 in federal education funds earmarked for deaf and honors students.
Schrenko, a suburban Augusta educator who was Georgia’s school chief from 1995 to 2003, was accused of diverting about half the money to her failed 2002 gubernatorial campaign and using $9,300 for a face lift.
As word of the guilty plea spread, speculation began about the timing.
Phil Kent got to know Schrenko when he was the conservative editorial page editor of the Augusta Chronicle. But he broke with her about 2000 when he criticized her in print for her erratic behavior as schools superintendent.
“I knew then there were serious problems with her,” said Kent, now a media consultant in Atlanta.
Kent surmised that Schrenko pleaded guilty because Merle Temple, her former close friend, lover and deputy superintendent was set to testify. “She didn’t want to go through the devastating testimony of Merle Temple,” Kent said. “That would really peel the bark off of her. It [The testimony] was getting more tawdry by the day.”
Chuck Clay, a former Republican state senator from Cobb County and former state party chairman, wondered what was the root cause of Schrenko’s downfall.
“I don’t think it was just greed and ambition and pure vanity,” he said. “I think her own physical and psychological ailments brought her to the gates of prison.”.
He pointed to her erratic behavior at the end of her second term as superintendent and the criminal charges against her. “So many things border on the absurd,” Clay said.
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July 12 set for Schrenko’s official sentence
The Atlanta Journal-Constitution
A sentence date has been set for July 12 for former state School Superintendent Linda Schrenko, who pleaded guilty Wednesday morning to defrauding the government and money laundering.
At that time, U.S. District Court Judge Clarence Cooper will review a pre-sentence report and decide how much restitution Schrenko must pay. The judge could also make a recommenation to the federal Bureau of Prisons about where Schrenko will serve her time.
Schrenko, 56, was on trial with two co-defendants for an alleged conspiracy to defraud the government of $600,000 in federal education funds earmarked for deaf and honors students. Prosecutors maintaned she used some of the money to finance her failed gubenatorial bid in 2002 and some for personal reasons, including a facelift.
Part of her sentence requires her to participate with the government in the prosecution of her co-defendants, A. Stephan Botes and Peter Steyn, and hand over any evidence against them. She will also be required to make full restitution, regardless of her finances.
After entering the guilty plea, Shrenko, a suburban Augusta educator who was Georgia’s school chief from 1995 to 2003, accompanied her attorney to the U.S. Attorney’s Office.
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Schrenko witness: ‘The money was diverted’
The Atlanta Journal-Constitution
Another government witness testified Tuesday about illegally funneling money into then-Georgia School Superintendent Linda Schrenko’s 2002 campaign for governor.
Richard Leonard, part of Schrenko’s campaign staff, said he followed orders of campaign manager Merle Temple to find friends and relatives to sign over a batch of $590 checks.
“The money was diverted back into the campaign,” Leonard told jurors today.
This is the second week of Schrenko’s federal public corruption trial on charges of embezzling and money laundering of more than $600,000 in federal education funds. Prosecutors allege about half of the money, meant for deaf and honors students, was funneled back into Schrenko’s failed bid for governor.
Leonard said he took the checks and approached his family and friends and asked them to accept a $590 check as payment for being part of a political focus group, even though they hadn’t participated in one. Then, they were to endorse the check and donate it to Schrenko’s campaign.
The focus group checks actually were from four companies owned by or affiliated with co-defendant A. Stephan Botes, who was seeking a $2.5 million state Department of Education contract and had agreed to help Schrenko’s campaign.
Prosecutors allege Botes and his chief operating officer, co-defendant Peter Steyn, went further, helping funnel the federal education money into Schrenko’s campaign. Steyn’s attorney blamed Botes and said his client was following his boss’ orders.
Botes blames his underlings for committing crimes without his knowledge while he was away on other business. Schrenko maintains her innocence and blames Temple for abusing her trust, breaking the law and then turning on her to save himself from a lengthy prison sentence.
On Monday, witness Shawn Neal, who worked in the Augusta office of Schrenko’s daughter, testified that the former superintendent personally asked her to sign over to the campaign $3,540 in checks made out to Neal and her husband. Again, the checks were from companies owned by or affiliated with Botes and were for focus groups that never occurred.
Temple, Leonard and two others have pleaded guilty to participating in the scheme. All are expected to testify, which could help win them a lighter sentence.
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“I just have to hope that the truth comes out,” says Schrenko
The Atlanta Journal-Constitution
Former Georgia school Superintendent Linda Schrenko smiled on her way into the federal courthouse today and said her public corruption trial seems to be going well – so far.
Government witnesses have pinned much of the alleged scheme to swipe federal education dollars and funnel them into Schrenko’s failed 2002 gubernatorial campaign on her co-defendants, computer executive A. Stephan Botes and Bote’s former chief operating officer, Peter Steyn.
“I’m definitely pleased my name is not coming up because I wasn’t involved in all of this,” she told reporters. “I know eventually it will come up and I just have to hope that the truth comes out.”
But the key witness against Schrenko, her former deputy Merle Temple, has not yet testified.
Outside the courthouse, Botes, a former multimillionaire, scoffed at being placed on house arrest Friday, with FBI agents watching his Alpharetta home at Country Club of the South through the weekend. Assistant U.S. Attorney Russell Vineyard told the judge Botes’ ties to Atlanta were waning and he feared Botes might flee to his estate home on the edge of the Indian Ocean in South Africa.
“What a bunch of nonsense,” Botes said on his way into the courthouse. “Look at my house, there’s nothing packed.”
Testimony in the case continues today.
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Accountant weathers defense questioning
The Atlanta Journal-Constitution
Prosecution witness Johnny Turner, despite grueling questions by defense attorney Brian Steel, remained calm on the stand Friday in the federal corruption trial of former state school Superintendent Linda Schrenko.
Steel, who at times almost shouted, tried everything to rattle Turner, a former chief financial officer for a company whose executives are accused of illegally funneling money to Schrenko’s 2002 campaign for governor.
Turner testified Thursday that software executive and former boss A. Stephan Botes, a co-defendant in the case, ordered him and Peter Steyn, another co-defendant in the case, to help funnel nearly $300,000 in federal education funds into Schrenko’s campaign.
In return, Schrenko signed a state Department of Education contract giving Botes’ company $2.5 million, Turner testified Thursday, identifying dozens of documents, business notes and bank records detailing the scheme.
Some jurors chuckled at the courtroom theatrics today, but it was Steel whose face reddened with irritation while Turner, an accountant, responded in an even and matter-of-fact tone.
Steel peppered Turner with questions, asking if he was the real culprit who is now trying to pin crimes on his boss.
“You are so document-oriented, where is one stitch of evidence besides your word?” Steel said, his voice blaring through the courtroom.
Turner darted around the question before saying he didn’t have proof because Botes gave the marching orders during conversations, not in e-mails and not on the phone.
Steel told jurors that Turner, who pleaded guilty to having a role in the scheme, can’t be trusted. The attorney pointed out that Turner is the type of person who put his own father and his business partner in jeopardy by using their businesses to funnel money into Schrenko’s campaign.
“What did you tell the man who raised you, who fed you, who made you go to school?” Steel snarled, pounding his fist on the lectern. “You threw your daddy under the bus.”
Steel continued his rapid fire at Turner.
“You played your father’s love for you and abused your trust in his eyes. What do you do when you go home to your baby? Do you say: Are you proud of Daddy?”
“How do you live with yourself sir?”
In a soft-spoken tone, Turner said he regrets his lapse in judgment.
“I can’t go back and undo it,” he said.
Steel is expected to continue questioning Turner this afternoon.
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