Before LA schools Supt. Alberto Carvalho resigned, the Board of Education warned him in a confidential letter that it had grounds to fire him, citing several allegations, including that Carvalho allowed a district contractor currently under federal investigation to pay for his trip to Washington, DC.
Issues raised by the board in the letter sent to Carvalho include a 2023 trip to the White House allegedly sponsored by AllHere, a company that is at the center of an ongoing FBI investigation involving the former superintendent, according to three sources with direct knowledge of the letter.
The school board’s letter indicates that Carvalho may have been dismissed “for cause” due to allegations that he benefited from money that he did not report on the required disclosure forms, said sources who asked not to be identified because they are not authorized to speak officially on the matter.
Details of this and other books were described in The Times newspaper by two regional sources who reviewed the document. Representative Carvalho also confirmed the contents of the board’s letter.
Carvalho’s spokesman said all the issues raised were resolved by mitigating factors and that none of the actions identified – individually or collectively – would have justified Carvalho’s dismissal.
Although Carvalho’s resignation was widely reported — and prompted the appointment of Andrés Chait as the new superintendent three days later — there was no indication at the time that the school board was pressuring Carvalho to step down. The seven-member school board placed Carvalho on paid leave two days after the Feb. 25 FBI raid on his home and office.
In his resignation letter, which Carvalho made public, he said he is leaving “because I believe that our schools must always focus on students and learning without interruption.” And that remains his position, his representative said: Carvalho wants to avoid unproductive anger.
Carvalho’s resignation letter focuses on his achievements. In LA, as in his previous position as superintendent in Miami, Carvalho has received widespread praise for accelerating student success.
In response to the alleged undeclared financial benefits, Carvalho’s representative provided written answers and explanations to questions sent by The Times.
The board’s letter to Carvalho revealed at least three transactions through which Carvalho allegedly received an undisclosed amount of profit, three sources said. The sources did not disclose the amount of money allegedly paid for the benefits mentioned in the letter.
These alleged benefits include:
- AllHere is accused of documenting the August 2023 trip to the Biden White House.
- Ticket and other benefits allegedly related to at least two baseball games/events at Dodger Stadium.
- Go to an education-related conference in Denver.
In addition, the board’s letter questions Carvalho’s alleged use of a state car and driver, services reserved for work-related activities only, the sources said.
County officials refused to give Carvalho the letter, instead assigning the request to the county’s Public Records Act division, where other records requests have taken years to resolve.
In a statement Saturday, the district declined to comment on the exchange between the school board and Carvalho, calling it a “personnel matter.”
“The District is committed to high standards of ethics, accountability and transparency,” the statement said. “The district takes seriously its responsibility to investigate any allegations of wrongdoing and take appropriate action if necessary.”
AllHere connection
Law enforcement sources have confirmed that the main focus of the investigation is Carvalho’s connection to AllHere, the now-defunct tech startup hired to build a malicious artificial intelligence chatbot called “Ed.”
On the 4th of Aug. 2023, Carvalho included AllHere’s chatbot in his annual CEO address at Disney Hall. He promised a revolution in personalized education.
Four days later, Carvalho was jetting across the country to speak on Aug. 8 at a White House cybersecurity conference, with AllHere allegedly paying for the plane and hotel accommodations, sources told The Times.
Meanwhile AllHere has already won a contract to develop the chatbot, a deal that could pay up to $6.2 million. The company did $3 million worth of work before collapsing within a year.
The bidding process that won AllHere the contract was completed months before Carvalho traveled to Washington, DC But other potential long-term deals were possible.
For example, AllHere would play an ongoing role in monitoring the questions the chatbot received and the answers it provided, while continuing to refine the tool. Carvalho talked about a commercial partnership – with AllHere and LA Unified licensing their shared product nationwide.
In late 2023, apparently unknown to LA Unified, AllHere, behind the scenes, was struggling to stay afloat and misleading investors, according to prosecutors who filed fraud charges against the company’s founder Joanna Smith-Griffin.
Smith-Griffin has denied wrongdoing. Based on prosecutors’ account, AllHere’s deal with LA Unified could be seen as a last resort to salvage a dire financial situation.
As part of its scheme, AllHere allegedly promised a $600,000 commission to Debra Kerr, an educational marketing consultant and friend of Carvalho’s from Florida. His role was to help secure a deal with LA Unified, according to Kerr’s account during the AllHere bankruptcy. Kerr said he did his job, but he wasn’t paid.
It is in this context, that AllHere, at the financial risk of the company, is said to have paid for Carvalho’s trip to the White House gathering, where Carvalho was presented, sources said.
The FBI investigation exploded into the public eye in February when agents conducted an early morning raid, drawing guns and detaining Carvalho and his wife while they were being searched. Kerr’s home in Florida was raided by the FBI that same day.
Kerr did not respond to requests for comment. In March, Carvalho issued a statement denying any wrongdoing and saying he wanted to return to work.
Neither Carvalho nor Kerr have been charged, and authorities have made no official statements about the investigation. The contents of the warrant affidavits and the warrants themselves are under seal.
Carvalho’s representative said this week that the district has been aware of AllHere’s contribution to Carvalho’s work-related travel. When AllHere collapses in mid-2024, the region – with the support of Carvalho – launched an internal review. At the time, if not before, Carvalho’s travel expenses were reviewed by senior officials and the county’s law enforcement agency, which took no action, Carvalho’s spokesman said.
It is not clear how much the Board of Education was told about the travel costs before the raid.
As is standard practice, LA Unified has been cooperating with the legal investigation, managing communications with the help of outside law firm Jones Day, sources said. The attorneys also reported to district officials any information that was turned over or otherwise revealed, the sources said.
The cooperation comes as the Trump administration has opened at least three investigations into L.A. Unified — one related to its Black Student Success program, another regarding additional resources given to schools that are at least 70% white, and a third regarding the handling of sexual misconduct allegations. Carvalho has emerged as a critic of Trump and a defender of immigrants. The board also came under pressure from union leaders who said they wanted Carvalho removed from office.
Carvalho financial disclosure
Under California law, top government officials – including school district superintendents and school board members – are required to make financial disclosures through a document called Form 700. This Statement of Economic Interests allows the public to track potential conflicts of interest.
Under state law, any single gift — or multiple gifts from the same source that add up to $50 or more over the course of a year — must be disclosed.
Tthe total dollar amount a senior public official could receive from any source during an annual reporting period ranged from $520 to $630 during Carvalho’s years in office.
Carvalho filed an “office” Form 700 when he started work in February of 2022 and filed annual updates. He hasn’t posted a single one this past school year. He has not yet filed his “out of office” Form 700.
In Carvalho’s “taking of office” form, which covered the time before he became superintendent, Carvalho “excessively disclosed” giving more information than was necessary, a testament to his faith in following the rules, his spokesman said.
Carvalho’s recent Form 700s – for the entire duration of his tenure – is virtually empty. The only disclosure is the “officer training” provided by Denver schools Supt. Alex Marrero for a fee between $2,000 and $10,000.
Representative Carvalho said the events and gifts in question were work-related and were made public even though the Form 700 was not disclosed.
Carvalho’s representative agreed that the entries should have been made on Carvalho’s forms, but the proper remedy, for example, would be for Carvalho to amend and correct the forms – and pay a fine.
700 forms are filed under penalty of perjury.
What is known about other quotes in the book
The Dodger Stadium event was apparently an annual gathering sponsored by the California Credit Union – and later its affiliate – to honor new teachers who qualify as “Rookies of the Year.” Carvalho is involved in honoring teachers, as is school board President Scott Schmerelson in 2024.
The Dodger Stadium event was an extended work day, given Carvalho’s role in the event, his representative said.
Other county executives were at the 2024 Denver convention with Carvalho, his representative said. This, too, was a work-related trip.
Two regional sources did not say which business allegedly paid for or sponsored the Denver trip.
Regarding the use of the county car and driver, Carvalho is willing to reimburse the county for these costs if asked to do so, the spokesperson said.
Get out of conversations
According to sources, when Carvalho began to think about leaving office, he first proposed to pay more than 1 million dollars and legal compensation, in which the county will cover his legal expenses.
The district objected to the proposal for a few months’ pay to give the right to compensation, sources said.
The board then sent a letter, raising issues that could be cited in the dismissal for cause.
Under Carvalho’s contract, if he was fired “for cause,” he would not be entitled to compensation. If he is fired without cause, his contract provides for 12 months minimum pay. Under no circumstances, including resignation, will you be entitled to compensation for unused vacation days.
Carvalho’s new four-year contract took effect 11 days before the FBI raid. Like his first contract, the new one would have paid him $440,000 a year and also provided him with a $50,000 annual pension payment.
A district spokesperson said this week that there is no settlement or exit agreement between Carvalho and LA Unified.
