In the heart of the New Orleans French Quarter, just blocks from the bars and bright lights of Bourbon Street, a beautifully restored bright yellow building connects two of the central characters in the financial demise of Dallas County Schools, the troubled government school bus agency that lost millions on a risky business venture.
NBC 5 Investigates has learned since 2014 the top floor of the building at the corner of Decatur and Iberville has been home to a luxury vacation apartment used by former DCS Superintendent Rick Sorrells and his family. The apartment next door to Sorrells’ rental was used by Robert Leonard, the CEO of Force Multiplier Solutions and the company DCS partnered with on a school bus camera venture that hemorrhaged money and put DCS on the brink of financial collapse earlier this year.
The building’s owner confirmed Sorrells and Leonard have occupied two of the three apartments in the building. The owner’s attorney recently told NBC 5 Investigates that Leonard is no longer a tenant and Sorrells’ lease is up in November.
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A source with knowledge of the apartment situation told NBC 5 Investigates Sorrells also had access to the Leonard apartment for hosting larger groups of family or friends. Video posted on a social media website appears to show at least one such occasion.
The side-by-side apartments raise new questions about the relationship between Sorrells and Leonard and whether it went beyond the bounds of ethical guidelines governing the conduct of school district officials and vendors. During Sorrells’ time as superintendent, the DCS board approved contracts with Force Multiplier Solutions that directed more than $70 million of public money to the company. Sorrells signed those contracts.
DCS and Force Multiplier partnered on a school bus camera program that dates back to 2012. DCS bought cameras from FMS and then gave them to other school districts for free in exchange for a portion of the ticket revenue collected from drivers caught on camera running past school bus stop arms. But signing up a large number of school districts proved challenging, and ticket collections lagged behind projections. Still, DCS continued to purchase millions in additional camera equipment from FMS. Ultimately DCS wound up in significant debt and at risk of being unable to pay its bills.
|Rick Sorrells, former DCS superintendent forced to retire earlier this year amidst questions about the finances at DCS and just days after influential Texas Sen. Royce West (D-Dallas) called for Sorrells’ resignation. Sorrells remains on the DCS payroll through the end of the year under an exit deal he negotiated with DCS.|
|Robert Leonard, CEO of Force Multiplier Solutions, a company that has collected tens of millions of dollars from DCS contracts related to a school bus safety camera program. Leonard’s company was founded in Louisiana and later moved its headquarters to Dallas.|
Business dealings between Force Multiplier Solutions and Dallas County Schools are currently the subject of an ongoing internal audit at DCS. Sources familiar with the situation also told NBC 5 Investigates the FBI and the Texas Rangers are looking into what caused the financial crisis at DCS.
After hearing Sorrells might have a French Quarter vacation apartment with connections to Leonard, NBC 5 Investigates planned to travel to New Orleans to investigate further.
In early September 2017, the NBC 5 Investigates team arrived at Dallas Love Field to catch a flight to New Orleans and discovered Rick Sorrells and his wife happened to be sitting at the airport gate waiting to board the same flight. They did not appear to notice the NBC 5 Investigates team board the plane.
After the flight landed in New Orleans, NBC 5 Investigates went straight to the apartment building at Decatur and Iberville and watched Sorrells enter the building.
The next morning NBC 5 approached Sorrells to ask how he ended up with an apartment in a French Quarter building that has connections to Robert Leonard.
Sorrells said he got the apartment a few years ago when his daughter was a student at LSU, which is about 80 miles away in Baton Rouge.
“I really shouldn’t be talking to you. I can’t say anything unless I get it approved by Dallas County Schools,” Sorrells added.
Sorrells remains on the payroll at DCS until December under terms of a retirement deal reached with the board earlier this year when he was forced out of his superintendent position amid questions about the agency’s financial troubles.
During the brief encounter with Sorrells in New Orleans, NBC 5 Investigates also asked him who is paying the rent on the French Quarter apartment. Sorrells replied, “I am.”
When asked if Robert Leonard was involved in the Sorrells family getting an apartment in the building, Sorrells responded, “No, he’s not.”
A source with knowledge of the relationship between Sorrells and Leonard and the apartment situation told NBC 5 Investigates the side-by-side units in the small building are no coincidence.
The source, who asked not to be identified because of employment concerns, said the Sorrells and Leonard families had a very close personal relationship.
“Cozy, very cozy, dinner on the weekends,” the source said.
The source added that the Sorrells family often used the Leonard apartment unit to host larger gatherings.
“They (the Sorrells) were allowed to use both sides. They had the use of both apartments,” the source said.
Social media postings appear to show at least one such case.
Video posted on Instagram in 2017 shows one of Sorrells’ children, Michael Sorrells, dancing in a kitchen described as being located in the New Orleans French Quarter. John Helms, a friend of Michael Sorrells who is also seen in the video, told NBC 5 Investigates the video was taken in the apartment next door to the Sorrells’ unit during a spring break trip he took with members of the Sorrells family.
The source with knowledge of the apartments told NBC 5 Investigates the kitchen depicted in the video is in fact Leonard’s unit. The layout of the kitchen in the video is also consistent with floor plans of the Leonard apartment, obtained from the New Orleans Department of Safety & Permits.
Leonard’s unit served as a corporate apartment for Force Multiplier employees and business associates, and Leonard did not live there, the source said.
Over the last several years property records show Leonard has owned a home in Dallas and another apartment in the French Quarter for a time. He now owns a home in Metairie, a New Orleans suburb.
The apartments raise significant ethical and legal questions according to people familiar with rules governing conduct between school district officials and their vendors.
“Certainly anyone who had a vetting responsibility for those contracts would be very uncomfortable with this kind of personal relationship overlaying a business relationship,” said Cal Jillson, a political science professor at Southern Methodist University who is frequently consulted on ethical issues in Texas government.
Under Texas law, school district officials are required to file a “conflicts disclosure statement” if a vendor with a district contract gives the official one or more gifts with an aggregate value of more than $100 in the 12 month period prior to the date the official became aware of the contract.
Attorney Stephen Dubner who specializes in Texas education law, said lodging can be considered a gift under the law.
If the Sorrells family was in fact allowed to use the Leonard apartment without paying for it, Dubner said that would likely require disclosure since a comparable hotel room in the French Quarter would typically cost more than $100 per night.
“That raises some concerns about whether there are some disclosures that should have been made,” Dubner said.
DCS records show Sorrells did not disclose any gifts from any vendors on his most recent conflicts disclosure statement, posted on the DCS website. That statement covers the period from February 2015 to February 2016. Sorrells also listed no gifts from vendors on a previous 2013 disclosure statement. DCS said it has been unable to locate any other disclosure statements for Sorrells.
Sorrells did not respond to detailed questions NBC 5 Investigates sent after the meeting in New Orleans asking him about his family’s use of the apartments and his ethics disclosures.
Under Texas law, school district vendors also must disclose gifts of more than $100 given to school officials. DCS said it could not locate any disclosure forms filed by Force Multiplier Solutions.
Robert Leonard did not return calls, emails or text messages from NBC 5 Investigates seeking answers to a list of questions about the apartments.
Leonard instead replied via Dallas criminal defense attorney Chris Lewis who said, "Although Mr. Leonard is more than happy to answer all of your questions, I have advised him to refuse your request. As I'm sure you can appreciate there are a number of highly sensitive collateral considerations I must take into account in my attempt to provide Mr. Leonard with good counsel.”
NBC 5 Investigates has not been able to see copies of the leases for the Decatur & Iberville apartments. The leases were not recorded publicly with the Orleans Parish Civil Court, as sometimes occurs in New Orleans.
The building is owned by a New Orleans insurance agent and developer named Louis Faust, who retains the third apartment in the building. His wife operates a medical clinic located on the lower level.
When NBC 5 Investigates initially contacted Faust he said he believed Leonard and Sorrells may have two separate leases but said he was unsure and would need to check with his property manager and get back to us.
Several weeks later we received a statement from a New Orleans attorney representing Faust.
“Mr. Leonard is no longer a tenant of Mr. Faust, and Mr. Sorrells lease expires in November. Beyond that we are unable to release any additional information,” said the statement from Faust’s attorney, Billy Gibbens.
Gibbens said it is against their policy and rental agreements to release any tenant information.
Records obtained from the New Orleans Water & Sewerage Board show no record of Sorrells having a water account at the Decatur & Iberville building.
Water department records for 2016-17 show two entities have paid water bills for the address over the last year. One is an LLC belonging to Louis Faust, the other is Force Multiplier Solutions, Leonard's company which paid water bills using corporate checks.
The water records showed Force Multiplier had an unpaid balance of more than $1,100 as of late September. The Water Department said it was unable to provide any payment records beyond the 2016-17 documents.
NBC 5 Investigates asked Sorrells and Leonard if they could provide copies of the leases and other documents showing who paid the rent and utilities for each apartment unit. Sorrells did not respond. Leonard declined to answer questions via his attorney.
Former FBI agent Don Southerland, an NBC 5 consultant, said he believes investigators need to ask more questions about the apartments because they could provide more insight into the relationship between two men involved in a business arrangement that ended badly, incurring significant losses for taxpayers.
“This apartment thing is the type of thing that you would look at to better explain what happened in that relationship,” said Southerland, who now works as forensic audit consultant often hired by Texas school districts.
Southerland said as an investigator he would want to see copies of the leases along with canceled checks and bank statements. He would also want to interview the players involved.
“There’s a lot of smoke around this building,” Southerland said.
Both Southerland and Jillson said they believe it is important for taxpayers to know whether the ongoing business relationship between DCS and Force Multiplier was the result of appropriate arms-length business dealings or whether it involved a more personal relationship.
“I think there are so many suggestions here of a closer than business relationship and those questions are all the more serious because that business relationship went south so badly,” said Jillson.
In addition to financial losses on the camera program, NBC 5 Investigates previously reported on Leonard’s ties to a questionable land deal DCS undertook in apparent attempt to raise quick cash at a time when the agency was losing millions. DCS sold its school bus lots but then leased them back in a deal that provided short term cash in exchange for millions more in long-term lease payments.
Records show Leonard’s personal real estate agent was involved in the land transaction. Leonard has also acknowledged recommending the company that bought the land. After obtaining cash from the deal, records show DCS continued to purchase more cameras from Force Multiplier.
Texas lawmakers, frustrated with the agency's fiscal mismanagement, voted last spring to give voters in Dallas County the option to shut down DCS for good. The vote is scheduled for Nov. 7.
When NBC 5 Investigates approached Sorrells in New Orleans we also asked him how he would describe his relationship with Robert Leonard.
Sorrells responded, “I really don’t have a relationship with him at this time.”
But a Facebook post from 2013 suggests at one time the relationship between the families may have been different before the recent troubles at DCS.
Sorrells' daughter Meredith posted a photo of herself standing next to her father, both dressed in black tie attire. Beneath the photo Robert Leonard’s wife Linda posted a comment saying, “Love you guys!”
Sorrells' daughter replied, “Love you Linda Derbes Leonard!”